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CHAPTER 4Job Order CostingLEARNING OBJECTIVE SLO 1 How do job order and process costing systems as well as their related valuation methods differ? LO 2 What constitutes a job from an accounting standpoint? LO
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How to fill out job order costing

01
Gather all the necessary information about the job, including the materials and labor costs.
02
Create a job order costing sheet or form to record the details of the job.
03
Start by entering the job name or number, client information, and date.
04
Break down the costs into different categories such as direct materials, direct labor, and overhead.
05
Fill in the actual amounts spent on materials and labor for the job.
06
Calculate the total cost for each category and the overall job cost.
07
Review the job order costing sheet for accuracy and completeness.
08
Use the information from the job order costing to analyze the profitability of the job and make informed decisions for future jobs.

Who needs job order costing?

01
Job order costing is useful for businesses that provide customized products or services.
02
Manufacturing companies that produce goods based on customer specifications often use job order costing.
03
It is also beneficial for construction companies, professional service firms, and job shops.
04
Any organization that wants to track the costs and profitability of individual jobs or projects can benefit from job order costing.

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Job order costing is a costing method used to determine the cost associated with a specific job or project, allowing businesses to allocate costs accurately to individual jobs based on the resources used.
Businesses that produce customized products or services, where costs can be traced to specific jobs, are typically required to implement job order costing.
To fill out job order costing, a business must identify all direct materials, direct labor, and manufacturing overhead costs associated with the job, and then record these costs on a job order cost sheet for tracking.
The purpose of job order costing is to provide detailed cost information for individual jobs, enabling businesses to assess profitability, control costs, and make informed pricing decisions.
Job order costing must report information such as job number, description of the job, direct materials used, direct labor hours worked, overhead costs allocated, and total cost incurred.
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