# Job Costing — Introduction and the Job Cost Sheet
## What Job Costing is
Job Costing is a method of costing used in industries that manufacture customer-specific products.
> CIMA, London defines Job Costing as "the category of basic costing methods which is applicable where the work consists of separate contracts, jobs or batches, each of which is authorised by specific order or contract."
Under this method:
- Costs are collected and accumulated according to jobs, contracts, products or work orders.
- Each job (or unit of production) is treated as a separate entity for costing.
- The purpose is to ascertain the cost of each individual job, taking into account the cost of materials, employees (labour) and overheads.
## The Job Cost Card / Sheet
Because each job order is unique (asymmetrical to others due to specific, customised requirements), all expenditure relating to a job must be recorded separately.
The Job Cost Card (Job Cost Sheet) is the document used for this. It is a cost sheet on which the following are recorded for one job:
- Quantity of materials issued
- Hours spent by different classes of employees
- Amount of other expenses
- Share of overheads
### Typical contents of a Job Cost Sheet
Header / identification details: Description, Job No., Blue Print No., Quantity, Material No., Date of delivery, Reference No., Date commenced, Date finished.
Cost recording columns: Date · Reference · Details · Material · Labour · Overhead.
Summary of costs (compared as Estimated ₹ vs Actual ₹):
- Direct material cost
- Direct wages
- Production overhead
- = Production Cost
- Administration and Selling & Distribution Overheads
- = Total Cost
- Profit / Loss
- Selling Price
Per-job analysis: Units produced, Cost per unit, Remarks, Prepared by, Checked by.
The sheet lets management compare estimated vs actual cost for each job and compute the profit or loss on that job.