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Using JC PDF Print E-mail
Written by Cecilia Chee, Singapore   
Tuesday, 04 October 2011 11:08

 

 

Using Job Costing

In a job costing system, costs may be accumulated either by job or by batch. For a typical job, direct material, labor, subcontract costs, equipment, and other direct costs are tracked at their actual values. These are accrued until the job or batch is completed. Overhead or "burden" may be applied either by using a rate based on direct labor hours or by using some other Activity Based Costing (ABC) cost driver. In either case, once overhead/burden is added, the total cost for the job can be determined. If the accountant is using a general ledger accounting system, which lacks true job costing functionality, the costs must be manually transferred out of Work in Process to Finished Goods(Cost of Goods Sold for service industries). Of course, in the days of computerized job costing software, journaling costs manually is an obsolete process. Such hand-journaling is mandatory for companies that continue to use general accounting software to do job costing. Enlightened accountants are moving forward and using job costing software, thereby improving cost control, reducing risk, and increasing the chance of profitability.

 

Could Your Business Use Job Costing?

Job cost isn’t just for manufacturers……a lot of business types should be using job costing to accurately manage the numbers.   This artilce gives you an outline of what and why.  Filed under accounting

Excerpt……Job costing is extremely important for several reasons and helps you: keep up on the current pricing of each job cost item know if you’ve been overbilled by your vendors, point out inefficiencies in the work process, point to problems with subcontractors and employees

If you can’t figure out how to setup a job cost system that works for your business, please contact a qualified professional (CPA, accountant, bookkeeper, Certified QuickBooks Proadvisor) to help. The investment of time and money in setting up a proper job costing system goes a long way in helping your business be more profitable.

 

Last Updated on Tuesday, 04 October 2011 12:34
 
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