Job: A cost unit which consists of a single order or contract. Which choice best defines it?

• A. A cost unit that comprises more than one order
• B. A cost unit which consists of a single order or contract
• C. A cost center used for overhead allocation
• D. A standard production unit

Answer: (B)

In job costing, costs are tracked against a single, distinct piece of work—the job itself. A cost unit that consists of a single order or contract defines one specific job as the cost object. This means all direct costs and an appropriate share of overhead are accumulated for that one job only, allowing precise cost measurement and profitability analysis for that contract.

This is the best fit because it aligns with how job costing works: a unique job or contract is treated as its own cost unit. If a cost unit covered more than one order, it would blend costs from multiple jobs, which is not how a single job is evaluated. A cost center is an organizational unit for overhead control, not a unit of production for costing. A standard production unit relates to standard costing and normal production quantities, not a single bespoke job.