• Unit 2: Job Costing

    Manufacturing companies assign direct materials, direct labor, and overhead costs to their products. Direct materials and direct labor costs are easily identified and assigned. Overhead costs, however, are not so simple to assign to individual job orders. In this unit, you'll discover a couple of methods upon which companies rely when they need to calculate and allocate overhead costs to jobs. 

     Job costing systems can do more than simply track the costs of each job. Companies also use these systems to track revenue and the resulting profit for each job. Also, a job costing system can be used to identify areas of concern by comparing the cost estimate prepared before starting the job with information on the completed job cost sheet. This type of analysis often leads to changes in the production process and revised estimates for future jobs.

    Completing this unit should take you approximately 7 hours.

    • 2.1: What is a Job Cost System?

    • 2.2: Direct Material, Direct Labor, Factory Overhead

    • 2.3: Allocating Overhead Costs

    • 2.4: Practical Uses of ABC Costing