Job Cost Of Job Costing

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Accounting to determine which items or jobs are generating the most net income can be extremely important to financial managers in today’s economy. Managers must determine which products are making performing the best so that they can capitalize on profits. This also helps to know when it should cut its losses. There are three very useful methods of identifying costs associated to a particular item which are job order costing, activity based costing (ABC), process costing. Job order costing isolates costs to a particular job. ABC compares multiple items which are manufactured. Process costing assesses items which are massed produced and provides analysis to the cost through the various stages from beginning to completion. This essay will explain each of these methods and then provide examples for each of them.
Job Order Costing
Job costing is a method of calculating the amount of dollars that it will take to perform a job in its entirety for the entity performing the work. Job costing is a valuable tool for managers of financial information in a company because it is an efficient way of learning which jobs have made money and which jobs have lost money. This is because the job costing method can trace or link how much resource such as labor, material, and overhead are spent to complete the job. Steven Bragg states that “Job costing is the most common method for marshaling cost accounting information into a data structure containing usable information”. He then
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