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Hi john sir, plz explain about the following
A firm operates a job costing system and uses absorption costing. what should the cost control procedure be for each job?
a. direct costs should be compared to the estimate/quotation as the job progresses and remidial action taken.
b. profit /loss should be compared to estimate when the job is complete
c. feedback should be obtained from the customer
d. direct and indirect costs should be compared to the selling price as the job progresses and remedial action takenplz explain
thanksThe best would really be (a)
(B) – waiting until the job was complete would be too late to control anything
(C) – feedback from the customer would not be about costs
(D) – nearly right, but selling price will have a profit built in, we want to try and achieve budget profit (not just have any profit)
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