This is a broad costing system, which is applicable where work jobs consist of separate jobs, batches or contracts. Each job, batch or contract is a cost unit and in most cases, it is different from another. Each order made can be identified separately and the system is designed to find the cost of each order. Specific order costing is subdivided into:

  1. Job costing
  2. Batch costing
  3. Contract costing

JOB COSTING

This is a costing method which is applied when a job/cost unit is relatively of small size, is undertaken to fit the customer’s specifications and is of comparatively short duration: Each job moves through the operations continuously as an identifiable unit. The method is usually adopted by businesses, which receives orders for work peculiar to the needs of individual customers.

  1. Features of Job costing

Product is against the customer’s order and not on job stocks

Each job has its own characteristics and requires special attention and skills.

  1. Procedures of Job Costing

The application of job costing method begins when a customer’s order is received. After accepting an order, an individual work/job order number is assigned to each job for or separate order identification.. Production order is then made giving authority for the job to start. A job cost account for each job is then opened. In this account, all costs relating to that particular job are recorded and this account closed only when the job is complete. After completion of the job, an invoice is prepared and served to the customer.

  • Materials for each job are made using material requisition forms
  • Labour is charged on the basis of the amount of time used to complete that particular job as recorded in time-keeping records.
  • Overheads are charged on the basis of an predetermined overhead absorption rate.

Applied Overhead absorption rate = Budgeted Overheads ÷ Denominator value

The Denominator value where the denominator value refers to units of some specified overhead absorption base e.g. machine hours, direct labour hours.

Other Custom Business Writing services


Businesswritingservices.org offers other custom business writing services such as Management writing services: Management essays, Management Dissertations, Management company analysis, Management Research papers and term papers: Finance writing services: Finance essays, Finance Dissertations, Finance case study analysis, Finance Research papers and term papers: Economics Writing Services: Economics essays, Economics Dissertations, Economics thesis, Economics Research papers and Economics term papers: Marketing Writing Services: Marketing essays, Marketing Dissertations, Marketing company analysis, Marketing Research papers and term papers:Business Writing Services: Business Essay, Business Research paper, Business term paper, Business Dissertation, Business Thesis, Business Case study: Auditing Writing Services: Auditing essays,Auditing Research papers, Auditing term papers, Auditing Dissertation, Auditing Thesis, Auditing Case study: Business information systems: Business information systems essays, Business information systems Research papers, Business information systems term papers, Business information systems Dissertation, Business information systems Thesis, Business information Case study: Taxation writing services: Taxation essays, Taxation Research papers, Taxation term papers, Taxation Dissertation, Taxation Thesis, Taxation Case study:Human resources writing services: Human resources essays, Human resource Dissertation, Human resources Thesis, Human resources case study, Human resources Research papers and term papers: Business law writing services: Business law essays, Business law Research papers and term papers, Business law dissertation, Business Thesis, Business law case study. Join the rest of our Business Writing services at Business Writing Services.org.