Job Costing applies to specific jobs undertaken according to customer requirements and specifi- cations. Tally.ERP 9 enables the tracking of cost and revenue information down to the smallest detail.
In order to determine the actual costs incurred, every job is assigned a job number or a job name. Job costing systems determine the costs separately for each product or service, based on the jobs undertaken.
In a typical job costing environment:
‡ Many non-standard (customised) products/ service are produced/ rendered.
‡ Orders are executed based on customer requirements.
‡ Cost records are maintained for each distinct job.
‡ Costs are traced or allocated to jobs.
The advantages of Job Costing are as follows.
‡ Costs can be alloted to each element while the job is in progress.
‡ On the completion of a job, each element of cost, selling price and profit can be compared with estimates made earlier and other similar jobs.
‡ Suitable methods can be used to determine the price on a cost plus contract basis.