Define job order costing.
Understand the Problem
The question is asking for a definition of job order costing, which is a costing method used in accounting to track expenses for specific jobs or orders. This method allows businesses to determine the cost associated with individual projects, making it useful for organizations that produce unique or custom products.
Answer
Job order costing is a method to determine the cost of each unique product or specific job.
Job order costing is a costing method used to determine the cost of manufacturing each unique product or specific job. This method is ideal for companies that produce a variety of different products or specific services.
Answer for screen readers
Job order costing is a costing method used to determine the cost of manufacturing each unique product or specific job. This method is ideal for companies that produce a variety of different products or specific services.
More Information
Job order costing helps manufacturers track the cost of individual products and jobs. This method ensures precise cost calculation for projects that vary significantly, making it highly adaptable and suitable for customized production.
Tips
A common mistake is not allocating overhead costs accurately. To avoid this, ensure you have a thorough and consistent method for applying overhead costs to each job.
Sources
- What is Job Order Costing? | AccountingCoach - accountingcoach.com
- Job Order Costing Guide - Corporate Finance Institute - corporatefinanceinstitute.com
- Job order costing system definition - AccountingTools - accountingtools.com
