ECONOMICS

Detailed explanation-1: -Job-order costing applies costs to specific jobs which may consist of a single unit or a few similar units. Job-order costing deals with great masses of similar items. Job-order costing is not a common system used in product costing. Job-order costing is used by the chemical industry.

Detailed explanation-2: -To summarize the job order cost system, the cost of each job includes direct materials, direct labor, and manufacturing overhead. While the product is in production, the direct materials and direct labor costs are included in the work in process inventory.

Detailed explanation-3: -Job order costing is a costing method which is used to determine the cost of manufacturing each product. This costing method is usually adopted when the manufacturer produces a variety of products which are different from one another and needs to calculate the cost for doing an individual job.

Detailed explanation-4: -Your business can use job order costing and process costing to track production costs and allocate expenses, such as time, materials and labor, to your products, and both use about the same information to calculate unit cost.

Detailed explanation-5: -Definition of Job Order Costing Job order costing or job costing is a system for assigning and accumulating manufacturing costs of an individual unit of output. The job order costing system is used when the various items produced are sufficiently different from each other and each has a significant cost.