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Features of Job costing
2.4 Features
1) Production is undertaken only against order. Therefore, there is neither
production in anticipation of demand nor production for stock purposes.
2) Each job is different in terms of materials required, labour required,…
2.2 Prerequisites
2.2 Prerequisites
The application of job costing needs a proper support system. The following are the
requisites for the effective working of job costing system:
1) A well devised system of costing which defines cost centres, cost units…
Definition of Job Costing
Definition of Job Costing
“Job Costing is that specific form of specific order costing which applies where work
is undertaken according to customers’ specifications.”CIMA – London
Job order costing is called – job costing, specific…
JOB AND BATCH COSTING -Meaning of Job Costing
2.1 Meaning of Job Costing
Job order costing or job costing is a form of specific order costing. Under this
method, each job is treated as a cost unit and the costs incurred are collected
specifically for a job and the cost is…
Joint and by-products Costing
3.9 Joint and by-products Costing
3.9.1 Joint ProductsJoint products are two or more products which emerge at a certain point from the
same process. These emerge simultaneously, in natural proportions.
Features of joint products
1)…
Rejects and Rectification
3.8 Rejects and Rectification
3.8.1 Rejects
The word reject as a verb means to discard or not accept. It, as a noun means a product
that has not been accepted by the industry manufacturing it on account of several reasons.In the…
Treatment of Normal Loss, Abnormal Loss and Abnormal Gain
3.7 Treatment of Normal Loss, Abnormal Loss and Abnormal Gain3.7.1 Normal LossThis is the loss which is unavoidable in certain processes. This loss arises on
account of the inherent nature of the materials. The loss may arise on…
Applications of process costing
Applications
Process Costing is applicable to the following industries:
Chemicals, dairy, soap, meat products, paper, paint, textiles, oil refining, sugar,
petroleum refining etc.
Scrap and wastage
Scrap and wastage
The defective units which can be sold at a price (a small fraction of the cost) are
called scrap. Such of the units which cannot be sold and only have to be disposed
off are called wastage.
The accounting treatment of…
Process Loss
Process Loss
Any units lost in the process or becoming unfit or defective for sale as normal output
are called ‘process losses’. Loss is also the reduction in the quantity of output of a
process as compared with the quantity of input.…