Job order costing is a costing method that considers all costs associated with accomplishing customized requests of customers while still remaining profitable. The cost function is recorded separately as the customer requirements are almost different entirely. An example of job order costing is seen in companies that engage in customization. A construction company that builds customized buildings as per the requirements of each customer.
The customized nature of each order or job makes the costing unique for each unit manufactured. The direct material and direct labor used are different for each product and the allocation of manufacturing overheads is made based on a reasonable basis.
Luzadis Company makes furniture using the latest automated technology. The company
Refer to Problem 4-28. Reference from Problem
When is job order costing appropriate, and what types of businesses
On March 1 a dressmaker starts work on three custom-designed
Paintball is now played around the world. The process of making
Bonivo Inc. manufactures computers from commodity components to client specifications.
Refer to Problem 4-26. Reference from Problem
Toby Manufacturing produces three different products in the same plant and uses
Lucy Sportswear manufactures a line of specialty T-shirts using a
ErgoFurn, Inc. manufactures ergonomically designed computer furniture. ErgoFurn uses
