Question

Materials, labor, and overhead may be added:

a) On the costing sheet for each job.
b) In any processing department.
c) On the bill of materials before starting the job.
d) None of the above

Answer 1

In production and cost accounting, materials, labor, and overhead costs are typically added on the costing sheet for each job to accurately assign costs and control expenses. The correct answer is a) On the costing sheet for each job.

Step-by-step explanation:

The question pertains to where materials, labor, and overhead may be added in terms of production and cost accounting. These costs represent the variable and fixed costs associated with producing goods. Variable costs, such as materials and labor, fluctuate with the level of output.

In a manufacturing setting, materials, labor, and overhead costs are usually added on the costing sheet for each job. This allows for the accurate assignment of costs to specific jobs or batches of products, and is crucial for cost control and pricing decisions. Labor is treated as a variable cost because it is directly associated with the volume of goods produced; more output typically necessitates more labor.