Which costing method is used when production is made up of individual jobs, each job is different and identified separately as a cost unit?

Which costing method is used when production is made up of individual jobs, each job is different and identified separately as a cost unit?

• A. Batch costing
• B. Service costing
• C. Job Costing
• D. Continuous Operation Costing

Answer: (C)

When production consists of individual, unique jobs identified separately as cost units, the costs are accumulated for each job rather than across a batch or process. This means direct materials and direct labour are charged to the specific job, and overheads are allocated to that job using a chosen basis (such as labour hours or an overhead rate). The result is a clearly defined total cost for each job, typically recorded on a job cost sheet and reflected in work in progress until the job is finished. This approach is ideal for bespoke or one-off orders where knowing the exact cost and profitability of each individual job matters. For example, a custom piece of furniture or a single-printed order can be tracked this way to determine its true cost and help with pricing. In contrast, other costing methods group costs by batches, processes, or services rather than by distinct, identifiable jobs.

When production consists of individual, unique jobs identified separately as cost units, the costs are accumulated for each job rather than across a batch or process. This means direct materials and direct labour are charged to the specific job, and overheads are allocated to that job using a chosen basis (such as labour hours or an overhead rate). The result is a clearly defined total cost for each job, typically recorded on a job cost sheet and reflected in work in progress until the job is finished. This approach is ideal for bespoke or one-off orders where knowing the exact cost and profitability of each individual job matters. For example, a custom piece of furniture or a single-printed order can be tracked this way to determine its true cost and help with pricing. In contrast, other costing methods group costs by batches, processes, or services rather than by distinct, identifiable jobs.