2.2 Prerequisites
The application of job costing needs a proper support system. The following are the
requisites for the effective working of job costing system:
1) A well devised system of costing which defines cost centres, cost units labour
and overhead absorption rates and material pricing methods.
2) A well organized production management system which enables pre-
determination of costs.
3) A systematic time booking procedure enabling pre-determination of time required
for various jobs on various machines or at production departments.
4) Effective purchases system enabling proper and timely purchases of the
required materials for various jobs.
5) A good system of documentation.
