cost accounting job order

Job order costing

_____ is a cost accumulation system used when goods or services are produced based on distinct customer orders or batches, and each job is unique in terms of materials, labor, and production requirements. Under this system, costs are identified, measured, and accumulated for each specific job, making the job itself the cost object.

True

Barfield, Raiborn, and Kinney emphasize that job order costing is appropriate when:

• Products or services are customized or heterogeneous

• Production is intermittent, not continuous

• Management requires job-specific cost informationfor pricing, bidding, and profitability analysis

Direct Materials

Materials that can be physically and economically traced to a specific job.

Direct Labor

Labor costs that are clearly attributable to work performed on a particular job.

Manufacturing Overhead

Indirect production costs (e.g., factory rent, utilities, depreciation, supervision) that cannot be directly traced to individual jobs and must therefore be allocated.

Job Cost Sheet

– The central record that summarizes all costs incurred for a specific job; serves as a subsidiary ledger to Work in Process (WIP)

Material Requisition Form

– Authorizes and tracks the issuance of materials to jobs

Time Sheet / Labor Ticket

– Records direct labor hours spent on each job

Overhead Allocation Records

– Used to apply overhead based on an activity base