Deck 2: Job-Order Costing: Calculating Unit Product Costs

Answer 1

Job-order costing is used in situations where many different products, each with individual and unique features, are produced each period.

Answer 2

In absorption costing, all manufacturing costs, both fixed and variable, are assigned to units of product-units are said to fully absorb manufacturing costs. Conversely, all nonmanufacturing costs are treated as period costs and they are not assigned to units of product.

Answer 3

Normal costing systems apply overhead costs to jobs by multiplying a predetermined overhead rate by the actual amount of the allocation incurred by the job.