An order-specific costing technique, used in situations where each job is different and is performed to the customer's specifications. Job costing involves keeping an account of direct and indirect costs.
Since both types of costs are usually closely related (a job requiring high input of labor and material is likely to consume more power, machine time, supervision time, inspection time, etc.) indirect costs may be applied as an estimated fraction of direct costs. Job costing methods are similar to contract costing and batch costing methods, and are used in construction, motion picture, and shipping industries, in fabrication, repair, and maintenance works, and in services such as auditing.
Use job costing in a sentence
Job costing can be a major part of running a self employed business as time is often more valuable than goods to an independent worker.
You need to be able to figure out the best way to make job costing work for your business to get the most long term profit.
John had a very interesting role at the company, and his position involved job costing. He had to look at all the indirect and direct costs were and determine what the total costs were for that particular job.