When job costing is used at a service company,direct costs of serving the client are traced to the job,whereas the indirect costs of serving the client are allocated to the job.

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This is because, in job costing, direct costs are assigned to specific jobs, while indirect costs are assigned to a particular job using a predetermined allocation rate. In a service company, the direct costs of serving the client can consist of direct labor, supplies, and other expenses that can be directly linked to a specific job. Indirect costs, on the other hand, may include general overhead expenses like rent, utilities, and general admin expenses.

When Job Costing Is Used at a Service Company,direct Costs