Which of the following is not included in a job cost sheet?
a. applied manufacturing overhead cost.
b. direct labor cost.
c. product retail selling price.
d. direct material cost.
The Correct Answer and Explanation is:
The correct answer is c. product retail selling price.
A job cost sheet is a record used in job-order costing systems to accumulate all the costs associated with a specific job or order. It provides a detailed breakdown of the direct and indirect costs incurred during the production process, which helps in determining the total cost of the job and evaluating its profitability.
Here’s a breakdown of the options and why c. product retail selling price is not included in the job cost sheet:
- Applied manufacturing overhead cost (a): This is included in the job cost sheet. Manufacturing overhead refers to indirect costs that cannot be traced directly to a specific product, such as utilities, depreciation, and factory maintenance. Applied overhead is calculated based on a predetermined rate (e.g., based on labor hours or machine hours) and is assigned to jobs based on the usage of overhead resources.
- Direct labor cost (b): This is also included in the job cost sheet. Direct labor refers to the wages of workers who are directly involved in the production of goods. These costs are directly traced to the specific job or order they work on.
- Product retail selling price (c): This is not included in the job cost sheet. The selling price is based on the market conditions, competition, and profit margin desired by the company, and it is determined after the job cost is calculated. The job cost sheet focuses on the costs involved in production rather than the final selling price.
- Direct material cost (d): This is included in the job cost sheet. Direct materials are the raw materials that can be directly traced to the production of a specific job or order. These costs are added to the job cost sheet as the materials are used.
To summarize, the job cost sheet includes direct costs (direct materials, direct labor) and applied overhead, but it does not include the final selling price of the product, which is determined later and is part of pricing and sales functions, not job costing.