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JOB AND BATCH COSTING -Meaning of Job Costing

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2.1 Meaning of Job Costing
Job order costing or job costing is a form of specific order costing. Under this
method, each job is treated as a cost unit and the costs incurred are collected
specifically for a job and the cost is ascertained for the job specifically. A job may
consist of a job itself, a product, a batch of products, a service or any other specific
order.
The cost of a job is determined under various cost elements – material, labour and
overheads.
This method is suitable to industries where production is against orders received and
the production is not continuous. The products are for immediate sale and not for
stock. The jobs are always non-standard and according to customer specification. In
certain cases the material may be supplied by the customer.

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