The Importance of Job Costing- Video

Job costing acctg site captureJob costing is critical to the success of most businesses. You need to know what jobs are unprofitable (yes, unprofitable!), what jobs are highly profitable, and, in general, what jobs are more or less profitable than other.

Job Costing Definition

According to Chapter 19 of the Principles of Accounting (John Wiley & Sons) Job costing (also called job order costing) is best suited to those situations where goods and services are produced upon receipt of a customer order, according to customer specifications, or in separate batches. For example, a ship builder would likely accumulate costs for each ship produced. An aircraft manufacturer would find this method logical. Construction companies and home builders would naturally gravitate to a job costing approach. Each job is somewhat unique. Materials and labor can be readily traced to each job, and the cost assignment logically follows. (To view more information and examples, go to

For a brief explanation on what job costing is, what it helps you do, and what the benefits of setting up, implementing, and consistently using a job costing system are, watch this brief video:


I’d love to hear your thoughts on job costing.