Week 6 - Cost Behaviour and Job-Order Costing IV Flashcards
What are the two types of costing system used to determine product costs?
- specific order costing
- continuous operation costing
What comes under specific order costing?
- job costing
- contract costing
- batch costing
What comes under continuous operation costing?
- process costing
- service costing
- batch costing
When is continuous operating costing applicable?
Where goods and services are mass produced from repeated procedures
When is process costing used?
- where output units are identical or nearly identical
- where cost units are rarely separable - difficult to say what unit cost is
- ^^ instead, costs are attributed to a process and are averaged over the number of units
When is service costing used?
- for services or functions (canteens, maintenance) when there is heterogeneity, simultaneity, perishability and intangibility
When is specific order costing appropriate?
It is appropriate for organisations which produce cost units which are separately identifiable from each other
What kind of costing comes under specific order costing?
Job, batch and contract costing - work is undertaken in accordance with specific orders from customers
What are the products in specific order costing like?
Separately identifiable
What are costs attributed to in job and contract costing?
An individual job/contract
What are cost records maintained for in job and contract costing?
Each job/contract
How is job costing different to contract costing?
It is usually smaller scale and shorter term than contract costing
What is the job-order cost sheet?
The primary document for tracking costs associated within a given job
What is the materials requisition form for?
It is used to authorise the use of materials on a job
