Page 199 - F2 - MA Integrated Workbook STUDENT 2018-19
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Process costing
Job costing
Job costing is a form of specific order costing and it is used in a business where the
production is made up of individual jobs. Each job is different and has different
inputs of materials and labour. Each job is identified separately and the costs are
identified for this specific job, coded to it and recorded as job costs. Effectively the
job is the cost unit.
Typical examples of businesses that use job costing would be ship building, civil
engineering, construction, aeroplane manufacture, and vehicle repairs.
Test your understanding 1
Which of the following are characteristics of job costing? Select all that apply.
Tick
Customer-driven production
Job costing is a method of specific order costing
Complete production possible within a single accounting period
Can only be applied to manufacturing organisations
Costs are gathered on a job cost sheet
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