Higher Accounting - Job Costing

What is the best description of job costing?

• used when a product of one process becomes the material of another
• used in areas such as hotels, transport and entertainment where an actual product is not made
• used to determine a break-even point
• used when work consists of different products each time, made to meet customer's specific needs

Material costs in job costing must all come from the same department. True or False?

• True
• False

What items of expenditure go together to make up the PRIME COST?

• Materials only
• Labour only
• Both materials and labour
• Materials, labour and overheads

Where are you unlikely to see job costing being used?

• In a garage
• In construction
• In designer fashion
• In a chemical plant

There are two ways of expressing profit. Which one is being described here?
Expressed as a % of cost of job

• Profit mark-up
• Profit margin

There are two ways of expressing profit. Which one is being described here?
Expressed as a % of the selling price

• Profit mark-up
• Profit margin

How do you convert a profit margin % to a profit mark-up %?

• Profit Margin % / (100 - Profit Margin %)
• 100% / Profit Margin %
• (Profit Margin % - 100%) / Profit Margin %
• (100% - Profit Margin %) / 100%

True or False?
A company will always turn down a job which will not generate any profit.

• True
• False

True or False?
 Except when a factory-wide method of recovery is used, overheads are applied by each department using their own method e.g. machine hours or labour hours

• True
• False

What name below is NOT used to describe the document which is submitted to secure work from the customer in job costing?

• Tender
• Estimate
• Analysis
• Quotation