# Job Costing
## Definition
A method of specific order costing where each job is treated as a distinct cost unit. Costs are ascertained separately for each job and a separate Job Cost Sheet is maintained throughout production.
Examples: Visiting card printing, custom furniture, bridge construction, repair work.
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## When Is Job Costing Used?
When production is:
- Non-repetitive (each order is different)
- Made to customer specification
- Jobs can be identified separately throughout the production process
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## Process of Job Costing — Step by Step
| Step | Action | Document Used |
|---|---|---|
| 1 | Prepare a separate cost sheet for each job | Job Cost Sheet |
| 2 | Charge material cost as materials are issued | Bill of Materials (BOM) + Material Requisition |
| 3 | Charge labour cost as workers record time | Time Card / Job Card |
| 4 | Charge overheads using a predetermined absorption rate | Overhead Absorption Rate |
Total job cost is known on completion of the job.
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## Key Characteristics
- Production is heterogeneous — no two jobs are alike
- Cost identity is maintained per job number throughout
- Profitability can be measured at the individual job level
- Cost sheet moves with the job from department to department
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## Job Costing vs Batch Costing
| Feature | Job Costing | Batch Costing |
|---|---|---|
| Cost unit | Individual job | Batch of identical units |
| Production type | Non-repetitive, custom | Repetitive, standardized |
| Cost sheet per | Each unique job | Each batch |
| Example | Visiting card printing | Readymade garments |