What is Job Costing
Job costing is costing method used where a work is performed as per requirement of customer.
What is procedure of Job Costing
1. Customer Requirement
Customer specify it requirements. the famous example of job costing is furniture industry where every order is different from other order in term of requirement.
2. Detail Information
Production department will take precise details about the job. These details includes product features , quality of material used etc. Details about deadline for completion of job and number of unit is to be produced is also important aspect of job costing.
3. Prepare Estimate
Estimation department prepare an estimate of the required work. The estimation department calculate the total cost of the job . A desired percentage of profit is added to such cost and the price is quoted to customer.
4. Intimate Customer
Customer is intimated about the price and a formal agreement is signed where it is required. usually some amount is paid by the customer in advance.
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