Cost accounting

Question 1

What is job order costing (job costing)?

Answer 1

The method of product costing that identifies the job as the cost objective and is used when there are few units produced and each unit is unique or easily identifiable

Question 2

What are job cost records?

Answer 2

Records maintained for each product or service that serves as the primary records used to accumulate all costs for the job

Question 3

What is process costing?

Answer 3

A method of product costing that averages costs and applies them a large number of homogeneous items

Question 4

What do traditional costing systems (volume based) do?

Answer 4

Assign overhead as a single cost pool with a single plant wide overhead application rate using a single allocation base

Question 5

What do activity based costing systems(transaction based costing) do?

Answer 5

Assigns indirect costs to products based on the products demand for resource consuming activities