About Job Costing

Job-costing is the system of costing used to find out the cost of non-standing jobs.  These jobs are generally made according to customer’s specifications.  It is followed in business connected with printing, binding, repairing machine tool manufacturing, etc. In such concerns, it is necessary to keep a separate record of each job from the time the work on the job begins till is completed. A separate job card or cost sheet is maintained for each job or product in which all expenses of materials, labour, over-heads are recorded and cost of completing a job or manufacturing a product is found.  The method of ascertainment or estimation of costs is similar to that of unit costing.

While preparing the job cost sheet, in the absence of specific information, quotation for a job must absorb factory over-heads as a percentage of direct wages.  If different departments are involved, over-head absorption rates must be separately calculated for each department, office, selling and distribution over-heads must be absorbed as a percentage of factory cost.

Fixed expenses are spread over normal; production or total number of hours available for work, as they are incurred irrespective of whether or not production activity is carried out.  Actual output or actual hours are not considered.

PROFORMA OF JOB COST SHEET

Job cost sheet of Xyz for the period ended dd.mm.yyyy