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As far as we know regarding JOC (job order cost) , the output of any job can be a single unit or multiple similar or dissimilar units. With multiple outputs, a unit cost can be computed only if the units are similar or if costs are accumulated for each separate unit (such as through an identification number).
For example, Seagull Technology produces compact disk drives to the specifications of a variety of companies including Compaq. Seagull can determine the cost per disk drive for each company by accumulating the costs per batch of homogeneous products in different production runs and treating each production run as a separate job. In such cases, production costs of each job batch can be commingled because the units within the batch are not distinguishable and the total cost can be averaged over the number of units produced in the batch to determine a cost per unit. If the output consists of dissimilar units for which individual cost information is not gathered, no cost per unit can be determined although it is still possible to know the total job cost.
Remember eventhough actual overhead may be assigned to jobs, such an approach would be less customary because total overhead would not be known until the period was over, causing an unwarranted delay in overhead assignment. Activity-based costing can increase the validity of tracing overhead costs to specific products or jobs.
To eliminate the need for repetition, units should be read to mean either products or services because job order costing is applicable to both manufacturing and service companies. For the same reason, produced can mean manufactured or performed.
Remember eventhough actual overhead may be assigned to jobs, such an approach would be less customary because total overhead would not be known until the period was over, causing an unwarranted delay in overhead assignment. Activity-based costing can increase the validity of tracing overhead costs to specific products or jobs.
To eliminate the need for repetition, units should be read to mean either products or services because job order costing is applicable to both manufacturing and service companies. For the same reason, produced can mean manufactured or performed.
