What is Job Costing?
Job Costing is closely related to Activity Based Costing (ABC)
Here is an example of Activity Based Costing in a service sector environment.
Job costing is the process of determining the labor and materials cost for each job in a systematic way, and then using this information to create a quote for the customer. Job costing or cost accounting can be used in virtually any industry to ensure that the product pricing covers actual costs, overhead and provides a profit. The purpose of any business is to make money, and job costing is the most effective way to ensure that occurs. There are three elements to job costing: determine customer requirements, identifying job related costs and overhead. The most important item in this process is accurate tracking of time and costs associated with any job. There are a several accounting software packages available to help business owners accurately track all business expenses. In order to provide an accurate quotation, it is very important to specify the exact requirements in writing and to obtain agreement from the client. Once the details have been finalized, you can then begin to dete
