Which of the following statements regarding the uses and limitations of job costing is true?
A) Job costs are measured accurately
B) The total job cost of an individual unit is an incremental cost, that is, it does not include average costs of any type
C) Developing information within job costing systems requires judgment
D) Job costing systems are not subject to uncertainties

Question

Quizplus · Accepted Answer

Developing information within job costing systems requires judgment because it involves estimating the costs of the various inputs required to produce a specific product or complete a specific project. The accuracy of these estimates depends on the skill and experience of the individuals involved in the process. Option A is not necessarily true as job costs may not always be measured accurately due to estimation and allocation methods used. Option B is incorrect as the total job cost does include average costs of certain items such as direct labor cost and direct materials cost for the specific unit produced. Option D is also incorrect as job costing systems are subject to uncertainties such as variations in the cost of inputs, production time, and allocation methods used.

Which of the Following Statements Regarding the Uses and Limitations