Job costing

Job costing is a form of specific order costing and it is used when a customer orders a specific job to be done. Each job is priced separately and each job is unique.

• The main aim of job costing is to identify the costs associated with completing the order and to record them carefully.
• Individual jobs are given a unique job number and the costs involved in completing the job are recorded on a job cost sheet or job card.
• The selling prices of jobs are calculated by adding a certain amount of profit to the cost of the job.

To detrmine the cost involves the following:

• identifying the cost of materials used for the job
• identifying the cost of labour used on the job
• absorbing overheads

Illustration - Job costing

Individual job costs are recorded on a job card similar to the one shown below.

Flow of documents

The flow of documents in a job costing system is shown as follows:

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