A job is a cost unit which consists of a single order or contract.

Related MCQs

• Which of the following procedure is incorrect for attributing overhead costs to cost units? I. Collecting production overhead costs by item II. Establishing cost centres III. Allocating and apportioning overhead costs to cost centres IV. Apportioning service cost centre costs to production cost centres V. Absorbing production cost centre costs into cost units
• In Job costing a cost is calculated for each individual job, and this cost can be used to establish the profit or loss from doing the job.
• The job costing method can therefore be applied in costing batches. The only difference is that a number of items are being costed together as a single unit, instead of a single item or service.
• Allocation is where overheads are allocated to cost centres. If a cost centre is responsible for the entire cost of an item of expenditure, the entire cost is charged directly to the cost centre.
• A separate record must therefore be maintained to show the details of individual jobs. Such records are often known as job cost sheets or job cost cards.
• In a costing system, a job account is similar to a work in progress account, except that it is for one job only. In a company that specialises in jobbing work, the work in progress account is the total of all the individual job accounts.
• When the abnormal has a scrape value the net cost of abnormal loss (cost of abnormal loss minus its scrap value) is then transferred as a cost to the cost accounting income statement at the end of the accounting period.
• Sub contract cost is always to be treated as ……………….to the contract.
• Overhead absorption is the process whereby overhead costs allocated and apportioned to production cost centres are added to unit, job or batch costs.
• Overheads can be absorbed into cost units by means of: • Physical unit produced • Percentage of prime cost • Percentage of direct wages • Direct labour hour rate • Machine hour rate