Question

Job CC14 has been completed. Under normal costing, which of the following costs would NOT be included in the job sheet for this job?

Option 1: Direct Materials
Option 2: Direct Labor
Option 3: Variable Manufacturing Overhead
Option 4: Sunk Costs

Answer 1

Sunk costs are not included in the job sheet under normal costing because they are costs that have already been incurred and cannot be recovered. They do not influence future production or pricing decisions.

Step-by-step explanation:

Under normal costing, direct materials, direct labor, and variable manufacturing overhead are typically included in the cost of a job. However, sunk costs, which are costs that have already been incurred and cannot be recovered, should not be included in the job sheet. Fixed costs, often in the form of sunk costs, play no role in economic decisions about future production or pricing because they cannot be altered once they have been spent.