Question

In a job-order costing system, if a spoilage is not caused by any particular job, it is:

a.subtracted from the cost of goods sold.
b.across all jobs through applied overhead.
c.charged to any of the production accounts.
d.to the cost of the first job dealt with.

Answer 1

When spoilage in a job-order costing system is not attributed to a specific job, it is typically allocated across all jobs through applied overhead, ensuring fair and accurate allocation of production costs.

Step-by-step explanation:

In a job-order costing system, when spoilage is not caused by any particular job, the cost of this generalized spoilage is typically allocated across all jobs through applied overhead. This ensures that the cost of spoilage is spread uniformly rather than attributing it to a specific job or the first job, which would be unfair and inaccurately represent the actual cost of each job. Allocating spoilage across all jobs as overhead helps better reflect the true costs of production and maintain accurate costing for each job.

By spreading the costs of general spoilage across all products, businesses can more accurately assess the profitability of each job and prevent any single job from being unfairly burdened with the cost of spoilage. As such, the correct answer to the question is: Spoilage that is not caused by any particular job is allocated across all jobs through applied overhead.