Internal job costing is best described as:

Internal job costing is best described as:

• A. The cost of a product is charged to the production department.
• B. The cost of a specific internal job is charged to a used department.
• C. The cost is allocated to the entire factory's overheads.
• D. Costs are recorded per batch.

Answer: (B)

Internal job costing focuses on the cost of a specific internal service or job and assigns that cost to the department that requested or used the service. The idea is to treat internal work like a chargeable job: you accumulate direct costs plus an appropriate share of overhead for that internal job, then bill it to the department that benefited. This keeps costs traceable and helps the consuming department see the true cost of the internal support it receives. For example, if the internal maintenance team fixes a machine for a particular production line, the full cost of that maintenance is charged to that production line’s department, not spread across the whole factory. This differs from general product costing, which attaches costs to a finished product or job for external customers, or from broad overhead allocation to the entire factory, or from recording costs by batch.

Internal job costing focuses on the cost of a specific internal service or job and assigns that cost to the department that requested or used the service. The idea is to treat internal work like a chargeable job: you accumulate direct costs plus an appropriate share of overhead for that internal job, then bill it to the department that benefited. This keeps costs traceable and helps the consuming department see the true cost of the internal support it receives.

For example, if the internal maintenance team fixes a machine for a particular production line, the full cost of that maintenance is charged to that production line’s department, not spread across the whole factory. This differs from general product costing, which attaches costs to a finished product or job for external customers, or from broad overhead allocation to the entire factory, or from recording costs by batch.