Question

Describe three how service organizations (actor, saloon, customer) use job-order costing.

Answer 1

Answer

Job order costing is a system for assigning and accumulating manufacturing costs of an individual unit of output. The job order costing is used when the various items produced are sufficiently different from each other and each has a significant cost.

Companies such as cosntruction companies and consulting firms, produce jobs use job costing. Secon some companies like furniture manufactures, produce batches of products. They produce all of the components of a single product.

The job order cost system is used when products are amde based on specific customer orders. Each product s considered a job. Costs are tracked by job. service rendered can also be considered as job.

Total job cost = Direct material + Direct Labour + Applied Overhead