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Manufacturing overhead cost was applied to jobs, Rmb ?

Manufacturing overhead cost was applied to jobs, Rmb ?

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Job costing is defined as " the category of basic costing method which is applicable where the work consist of separate contracts, jobs or batches each of which is authorised by specific order or contract." According to this method cost are collected and accumulated according to jobs. each job or unit of production is treated as separate entity for the purpose of costing. Job costing is carried out for the purpose of adverting cost of each job and takes into account the cost of material labour and overhead.

Job costing is done when

Jobs are executed for different customer according to their specification.

When no two orders are alike and each order/ job needs special treatment.

Where the work in progress differs from period to period on the number of jobs in hand.

Therefore manufacturing cost is applied to jobs to get the cost incurred on each job to come out the profitability of the job and if any extra cost incurred to charge to customer of the job. Job costing is suitable for manufacturing companies which are produce more than one product .

jeff jeffy answered 10 months ago
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