Job-order Cost System Explained

Today’s topic is Job Costing, aka Job-order Costing.  A job-order cost system is used by companies that make small numbers of distinct products.  To calculate the cost of making a bib, you would first create a job cost sheet.  This is just a document that lists all the costs of the job.  Next, you would assign costs to the job as it moves through the production process.
You add the cost of:
• Direct materials used
• Direct labor
• Manufacturing overhead

0:00 Introduction
0:38 How to calculate the cost per unit for a job
0:48 Why assign costs to jobs?
0:59 Job costing vs. process costing
1:43 Example of job order costing
3:57 What happens if applied MOH differs from actual MOH?
5:13 Can service providers use job costing?
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