Job costing Flashcards
2 types of costing systems to assign to products/services
Job costing and batch costing
Job costing system
In this system, costs are assigned to a distinct unit/ batch. The product or service is often custom-made.
Ex - Gearbox systems for cars, Wedding cakes, Suits, etc
Batch costing system
Cost system based on mass producing identical products or services.
Ex - Pens, Phones, Apples, etc.
Statement of cost of a product
Direct materials
Direct labour
Total prime cost
Total overhead cost
Total production cost
3 Cost centres
1) Cost centre - part of the organization responsible for costs
2) Profit centre - part of the organization responsible for profits
3) Investment centre -part of the organization responsible for investments
Basic formulas
Materials = Q * P
Labour = H * R
Methods for pricing materials
FIFO, LIFO, AVCO
