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Job order costing is one of two primary means of valuing inventory and cost of goods sold (COGS). In this system, costs are accumulated by job rather than continuously – as with a process costing system.
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Job order costing is used to allocate costs based on a specific job order. This guide provides the job order costing formula and how to calculate it.
A chart of accounts is presented in Exhibit 2-1 to demonstrate the cost flow in a job-order costing system. The chart is arranged using the accounting equation format, Assets = Liabilities + Equity. The chart includes T-accounts for the accounts commonly used in a job-order costing system.
23 Απρ 2023 · Job order costing is a special type of process costing system. Under this system, costs are assigned to jobs based on the number of direct labor hours required to manufacture each job. Costs are accumulated for each different job during the production process.
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