Question

The first step in the seven-step approach to job costing is to

A. select the cost-allocation base to use in assigning indirect costs to the job.

B. identify the direct costs of the job.

C. identify the job that is the chosen cost object.

D. identify the indirect-cost pools associated with the job.

Answer 1

The first step in job costing is identifying the job as the cost object and determining the firm's cost structure for accurate cost calculations.

Step-by-step explanation:

The first step in the seven-step approach to job costing is to C. identify the job that is the chosen cost object. This involves determining the cost structure for the firm, including total fixed costs and variable costs. Once the cost structure is clear, you can then calculate total cost, average variable cost, average total cost, and marginal cost. These calculations are foundational to understanding the relationship between production and costs, analyzing short-run costs, and forecasting potential profit.