Job Order Costing

Job order costing method is the accumulation of costs by specific job (i. e., physical units, distinct batches, or job lots). This method is appropriate if a product can be produced separately, distinct from the other jobs which require different amount of materials, labor and overhead.

Job Order costing is used when the products manufactured within the department or cost center are heterogeneous or dissimilar type of products.

Moreover, it also useful and widely acceptable for business engaged in made-to-order work in factories, workshops, and repair shops, construction or construction engineers, printing, aircraft manufacturing and for service business such as legal, medical, architectural, accounting and consulting firms.