ECONOMICS

Detailed explanation-1: -Job order costing is used to measure the revenue gained against the expenses incurred during the production process so that we can determine the profit for every unique job which is being manufactured.

Detailed explanation-2: -Job costing is an accounting method designed to help you track the cost of individual projects and jobs. It involves looking at direct and indirect costs, and it’s usually broken into three specific categories: labor, materials and overhead.

Detailed explanation-3: -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-4: -Job order costing is used to value inventory when the product or service is made-to-order, and standard costing is used when products are identical to each other. Costs for raw materials, labor, and overhead are calculated and included in an item’s standard cost.