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  Job Costing

Introduction to Job Costing

This method of costing is employed in Job Order Industries in which the production is as per the needs of the customer. In Job Order industries, the production is not on incessant basis, rather it is only while order from customers is get and that too according to the specifications of the customers. Subsequently, each job can be dissimilar from the other one. Method employed in such business organizations is the Job Costing or Job Order Costing. The purpose of this method of costing is to work out the cost of each job through preparing the Job Cost Sheet. A job might be a product, unit, project, contract, batch, sales order, service, particular program or any other cost objective which is differentiable clearly and distinctive in terms of materials and other services employed. The cost of done job will be the materials employed for the job, the direct labor used for the same and the production overheads and other overheads if any charged to the job.

The following are the characteristics of job costing.

Ø   It is a particular order costing

Ø   A job is performed or a product is produced is produced to meet the particular needs of the order

Ø   Job costing able a business to determine the cost of a job on the basis of which quotation for the job might be provided.

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