Job costing is an important function in the construction and service industry. To find the job cost, all costs for one specific job or a batch of manufactured goods are calculated. This includes materials, labor, and overhead costs. The costs carry forward through the life of the job or the batch.
Any industry can use job costing to make sure product and service pricing covers the actual costs and overhead and allows a profit to be earned. Long-term accountants generally know how to work out a job cost by hand, but these days there are plenty of accounting software options that will make the process easier.
In bookkeeping, job costing is simply the task of tracking the expenses on a project and comparing them to the revenue.
