BCAS-7
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BANGLADESH COST ACCOUNTING STANDARDS
The Institute of Cost and Management Accountants of Bangladesh
ICMA Bangladesh, ICMA Bhaban, Nilkhet, Dhaka–1205 Bangladesh
BCAS 7
Job Order Costing
BCAS-7
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BCAS 7: Job Order Costing
Summary
Effective Date : ICMAB prepares this standard for ultimate use and adoption by every company operating
in Bangladesh at its own discretion starting from the period beginning on July 1, 2014.
Objective : The main purpose of this standard is to guide companies for application of job order
costing for the purpose of costing customized jobs and pricing the job. Usually when
customers play important role in production with providing specific order, the process of
job order costing is more appropriate to price the customers. In case of tender pricing,
special order pricing, contract costing; the application of job order costing is very obvious.
The main purpose of this standard is to provide specific guidelines for applying job order
costing, accounting entries under job order costing and reporting the same.
Key Features :
Identifying the elements of costs in delivering a job to customers
Recording different elements of costs in the books of accounts
Visualizing the flow of costs in process costing environment
Prescribing the methodology of charging overheads to jobs
Disposing any difference between applied and actual amount of overheads
Illustrating the application of job order costing in a dummy situation
Prescribing different formats to bring standardization in practice
BCAS-7
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Contents
Particulars Paragraphs
Introduction
Scope 1-2
Objective 3-4
Definitions 5
Standards 6-14
Recording and Reporting 15–27
Appendix
BCAS-7
BCAS 7: Job Order Costing
The standards, which have been set in bold italic type, should be read in the context of the background
material and implementation guidelines of this standard. BCAS is not intended to apply to immaterial items.
Introduction
Job order costing is a very important cost accumulation method for product costing. Traditionally, job order
costing was used mostly in every situation as it is very easy to use. This standard gives a detail guideline of
applying job order costing for cost accumulation and ultimate product costing purpose. Job order costing can
also be applied in some special managerial accounting issues like special order decisions, costing for
customized products etc.
Scope
1. This standard is applicable to such a situation where adherence to customers’ requirements as specified
in work order or proforma invoice is very important.
2. Some industries where job order costing is the most appropriate one can be listed below, though the list is
not an exhaustive one, rather given as example:
a) Large woven, knitting, denim textiles or garments manufacturing industry where goods are being
shipped/supplied to customers according to the specification given in order.
b) Small and medium enterprises (SMEs) like furniture or toys making companies.
c) Service providing organization like dental services, hospitality industries, diagnostic services, audit
