COST ACCOUNTING
JOB ORDER COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Job-order costing deals with great masses of similar items.
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Job-order costing applies costs to specific jobs which may consist of a single unit or a few similar units.
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Job-order costing is not a common system used in product costing.
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Job-order costing is used by the chemical industry.
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Detailed explanation-1: -The correct answer is D. Job-order costing is mainly used in firms with custom product and services such as a video production company. Job order costing refers to a system for assigning and accumulating manufacturing costs of an individual unit of output.
Detailed explanation-2: -Definition of Job Order Costing Job order costing or job costing is a system for assigning and accumulating manufacturing costs of an individual unit of output. The job order costing system is used when the various items produced are sufficiently different from each other and each has a significant cost.
Detailed explanation-3: -Job costing is a costing method used to determine the cost of specific jobs, which are performed according to the customer’s specifications.
Detailed explanation-4: -To summarize the job order cost system, the cost of each job includes direct materials, direct labor, and manufacturing overhead. While the product is in production, the direct materials and direct labor costs are included in the work in process inventory.