Which total cost is included in the unit cost of a job?
A) the total costs of actual overhead
B) the total costs of applied overhead
C) the total costs of materials purchased
D) the total costs of labour worked on the in the factory

Question

Quizplus · Accepted Answer

The unit cost of a job includes the total costs of applied overhead. Applied overhead is calculated by applying the predetermined overhead rate to the actual activity level of the production process, resulting in an estimate of the overhead costs that should be charged to each unit of production. This cost is added to the total cost of materials and labour worked in the factory to determine the unit cost of a job. The total costs of actual overhead are not included in the unit cost of a job because they are not assigned to specific units of production but are instead reported as a separate expense. Materials purchased and labour worked in the factory are also included in the calculation of total cost, but they alone are not sufficient to determine the unit cost of a job.

Which Total Cost Is Included in the Unit Cost of a Job