Business FinancesQuestion 310 of 1632
Job costing is BEST described as a system that:
a.Tracks and assigns costs to each individual project
b.Spreads all costs equally across every project in a year
c.Records only the company's overhead expenses
d.Replaces the need for an income statement
Explanation
Job costing accumulates labor, materials, subcontractor, and other costs by individual project, letting the contractor compare actual costs to the estimate and judge each job's profitability.
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Related questions on this topic
- Why does retention (retainage) create a cash-flow challenge for a contractor?
- Including a contingency line item in a project budget is intended to:
- Which of the following is a VARIABLE cost that rises and falls with the volume of construction work performed?
- Which of the following would be classified as a DIRECT cost on a specific project's job cost report?
- A contractor's income statement for the year shows revenue of $800,000, job costs of $560,000, and overhead of $160,000. What is the net profit?
- A contractor's net profit for the year is $60,000 on total revenue of $750,000. What is the net profit margin?
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)