COST ACCOUNTING
MANUFACTURING OVERHEAD
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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used when a product of one process becomes the material of another
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used in areas such as hotels, transport and entertainment where an actual product is not made
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used to determine a break-even point
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used when work consists of different products each time, made to meet customer’s specific needs
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Detailed explanation-1: -Job order costing is a costing method which is used to determine the cost of manufacturing each product. This costing method is usually adopted when the manufacturer produces a variety of products which are different from one another and needs to calculate the cost for doing an individual job.
Detailed explanation-2: -Job costing is an accounting method designed to help you track the cost of individual projects and jobs. It involves looking at direct and indirect costs, and it’s usually broken into three specific categories: labor, materials and overhead.
Detailed explanation-3: -Job costing is used to accumulate costs at a small-unit level. For example, job costing is appropriate for deriving the cost of constructing a custom machine, designing a software program, constructing a building, or manufacturing a small batch of products.
Detailed explanation-4: -The job costing system assigns overhead costs (such as depreciation on production equipment and building rent) to one or more cost pools. At the end of each accounting period, the total amount in each cost pool is assigned to the various open jobs based on some allocation methodology that is consistently applied.
Detailed explanation-5: -Which of the following statement is correct with regard to job costing? Job costing differs from most other types of costing system because each cost unit is a job, and no two jobs are exactly the same. Each job is costed separately.