Cost and Works Accounting 2
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Q 1. Identify the characteristics of services: I. Intangibility: They do not have a physical substance unlike goods. They cannot be held or seen. II. Inseparability: Consumption and creation of a service cannot be separated. Services are consumed as they are created. III. Variability: Services face the problem of maintaining consistency in the standard of output. IV. Perishability: Services cannot be stored. V. Lack of ownership: Services do not result in the transfer of property in anything.
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Q 2. The job costing method can therefore be applied in costing batches. The only difference is that a number of items are being costed together as a single unit, instead of a single item or service.
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Q 3. The cost per unit manufactured in a batch is the total batch cost divided by the number of units in the batch.
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Q 4. Batch costing is similar to job costing in that each batch of similar articles is separately identifiable.
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Q 5. What would be the effect of inaccurate estimation of overhead absorption rates on a Job?
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Q 6. It is possible to use a job costing system to control the costs of an internal service department, such as the maintenance department and the printing department.
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Q 7. A computerised job accounting system contain which of the following features:
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Q 8. Cost plus pricing means that a desired profit margin is added to total costs to arrive at the selling price.
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Q 9. The usual method of fixing prices in a jobbing concern is cost plus pricing.
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