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job cost system the dougherty furniture

job cost system the dougherty furniture

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Job cost system

According to this method

costs are collected and accumulated according to jobs, contracts, products or work orders.

Each job or unit of production is treated as a separate entity for the purpose of costing. Job costing is carried out for the purpose of ascertaining cost of each job and takes into account the cost of materials, labour and overhead etc

In the simple language - today work is uncertain and cost also. When people/company determine a cost it will surely change in future it may increase decrease because of inflation. So cost of product also may increase in order to this coat company decide a specific profit before contract or word devide in parts /batch /jobs. So that part of work can complete fast as compare to whole work. In this case increment in cost have low chances. So it will help a lot.

In job cost system the dougherty furniture= we can work on jobs/batches and determine a specific profit for work.. For example 10% profit on total work or 20% etc. And than after we devide cost in different parts direct material direct labor and other expenses.

In case of furniture wood cost is comes under material costing

Labour work come under labour cost

And other expenses come in overhead.

Thanku

ekkarill92 answered 1 year ago
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