Costing Methods (Chapter 32)
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
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What is unit costing?
Method finding cost per unit by dividing total period output costs by number of units produced.
When is unit costing applicable?
Single homogeneous product manufactured continuously on large scale with identical units.
What items are excluded from unit cost sheet?
Taxes, interest, dividends, provisions, write-offs, cash discounts, asset sale gains/losses.
What is job costing used for?
Non-continuous production where each customer job is unique and costed separately.
Difference between job account and job cost sheet?
Job account tracks monetary costs only; job cost sheet includes non-monetary data (material requisitions, hours, operator IDs).
What is contract costing?
Job costing applied to large multi-year projects with separate contract accounts tracking costs separately.
What are progress payments?
Periodic billing by contractor based on certified work completion to prevent working-capital blockage.
Define retention money in contracts.
Fixed percentage withheld from progress payments as quality/performance guarantee, released post-completion.
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