Job Order Costing

Job order costing is a method used by companies to track the costs of individual projects or orders. It assigns direct costs like materials and labor directly to each specific job, while indirect costs (overheads) are allocated based on a consistent rate. This system helps businesses determine the exact cost and profitability of each project, making it easier to price future jobs accurately and manage expenses effectively. It’s commonly used in industries like construction, custom manufacturing, and printing, where each job is unique and its costs need precise tracking.