Steps involved in job costing
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Video Overview

Thus far in a manufacturing entity we have calculated the total manufacturing costs for a given accounting period. Job costing involves dividing these total costs between the particular jobs in the factory. A job is defined as a group (number of units) of similar products that are manufactured as a batch. For job costing the same principles apply as previously used. The cost for a job is the actual direct materials cost, plus the actual direct labour cost, plus the applied factory overheads allocated according to a predetermined overhead rate.  The total direct materials, the total direct labour and the total applied overheads are divided between the various jobs. In this tutorial we will focus on the steps involved in job costing that enable us to calculate the total cost of the job, and thus to give a perspective customer an accurate quote for the required job.