Job Order Cost Accounting
When an organization produces customized products based upon an individual customer order they will most
likely use a job order cost accounting system to track the costs of producing each individual job.
Job Cost Sheet
A job cost sheet is a separate record maintained for each job. The sheet will include customer information
and an assigned job number. The job cost sheet will track the direct costs assigned to the job. Direct
materials will be added to the job cost sheet on the basis of requisitions of raw materials submitted to
produce the job. Direct labor will be added to the job cost sheet on the basis of time tickets that employees
submit when they work on producing the job. Factory overhead will be applied to the job using a
predetermined overhead rate. We’ll expand on the flow of costs below.
Manufacturing costs flow
• Raw materials – direct and indirect materials
• Work in process –job is being produced
• Finished goods –completed goods
