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.

Related MCQs

• The disposal cost of abnormal loss is included in the abnormal loss account and therefore in the transfer of the cost of abnormal loss to the statement of profit or loss.
• Job costing is a costing method applied where work is undertaken to customers’ special requirements and each order is of comparatively short duration.
• 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.
• Batch costing is similar to job costing in that each batch of similar articles is separately identifiable.
• A job costing system is usually based on absorption costing principles, and in addition a cost is included for non-production overheads.
• 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
• 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.
• In job costing each job is given a unique:
• 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.