Job Order Costing
Accounting glossary · Understand, connect, apply
Job order costing collects costs for separately identifiable jobs, contracts or batches. Direct costs are traced to each job and production overhead is assigned using a defined method.
Example
A custom sign job uses materials of 600, labour of 400 and applied overhead of 300. Its recorded production cost is 1,300 before selling and administrative costs.
Remember the difference
A job cost sheet records the assigned cost; it does not guarantee a profitable selling price. Review incomplete jobs, allocation assumptions and differences between estimated and actual costs.
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Published 4 November 2026. Prepared with AI assistance; examples are fictional and simplified for learning.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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