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In a job-order costing system,Group of answer choicesan average cost per unit within a job cannot be computed.standards cannot be used.costs are accumulated by departments and averaged among all jobs.overhead is typically assigned to jobs on the basis of some cost driver.

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In a job-order costing system,Group of answer choicesan average cost per unit within a job cannot be computed.standards cannot be used.costs are accumulated by departments and averaged among all jobs.overhead is typically assigned to jobs on the basis of some cost driver.

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Solution

In a job-order costing system, overhead is typically assigned to jobs on the basis of some cost driver. This system allows for costs to be tracked by specific jobs, which can include specific orders, projects, or batches.

Here's a step-by-step breakdown:

  1. Identify the job: The first step in job-order costing is to identify the job or project that will be analyzed. This could be a specific order from a customer, a particular project within the company, or a batch of goods to be produced.

  2. Accumulate costs: Once the job is identified, the costs associated with that job are accumulated. This includes direct materials, direct labor, and overhead costs.

  3. Assign overhead: Overhead costs are typically assigned to jobs based on a cost driver. A cost driver is a factor that creates or drives the cost of the job. For example, a common cost driver for overhead is direct labor hours. If a job requires more labor hours, it will be assigned more of the overhead costs.

  4. Calculate job cost: Once all costs have been accumulated and assigned, the total cost of the job can be calculated. This includes the direct materials, direct labor, and assigned overhead.

  5. Determine unit cost: If the job consists of multiple units (like a batch of goods), the total job cost can be divided by the number of units to find the average cost per unit.

So, in a job-order costing system, an average cost per unit within a job can be computed, standards can be used, and costs are not necessarily accumulated by departments and averaged among all jobs.

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