Job costing

In this lesson

1. 0:00 Costing techniques for manufacturing businesses
2. 0:09 Job costing fundamentals and applications
3. 3:46 Job costing in practice: accounting system
4. 6:23 Job sheet example and pricing calculation
5. 7:17 Job costing T account and cost tracking

About this lesson

You'll discover how to track direct materials, labour, and overheads to each individual job using a job costing system, then use that accurate cost to set your selling price and calculate profit. The video walks you through the practical mechanics of job costing. Every job gets its own unique identification number so costs can be traced directly to it. You'll see how to build up the total cost using a job sheet or job card, recording direct materials, direct labour, and production overheads absorbed at an appropriate rate. The lesson includes a worked example showing how to calculate the prime cost, add absorbed overheads, and then apply a markup to arrive at your quoted price to the customer. You'll also learn how job costing integrates with your accounting system. The video demonstrates how to maintain T accounts for each job, showing how materials move in and out, labour is recorded, and overheads are absorbed. This approach ensures you capture the true cost of completing each contract, which is essential for accurate pricing, profitability analysis, and management decision-making in businesses where every project is different.

Duration: 9m