What is the job costing procedure?

The job costing procedure consists of the following aspects −

  • Direct materials cost is calculated with the help of requisition form.

  • Employee wages are also calculated by the payroll department with the help of tickets issued.

  • Overhead charges are also considered.

Manufacturing overheads are as follows −

  • Direct expenses
  • Direct labour
  • Material expenses
  • Manufacturing overheads of each department.

Job costing accounting procedures includes the following −


Order placing (customer studies the rates, material, quality, time to complete the order etc.)


Accountants do the cost of a job by keeping in view customer requirements and choices.

Order receiving

Customer places the order, if the customer is satisfied with job costs.

Production order

It is an official order to start production of a job. Manufacturers give production orders to their subsidiaries. In this order, they will set orders about when the job should be complete and how it is to be done. So that the required product is passed to the next department to run parallel.


Different departments have different job cards, which are explained below −


  • Material requisition − Transport of material from warehouse/storage unit to the production stage.

  • Bill of materials − Details of materials, prices, components, sub-components.

  • Analysis sheet of materials issued − Consists of materials and details when it is issued.


  • Operation schedule − Relates to allocation and reissuing of resources.

  • Job card − Details of job should be done in the production facility.

  • Analysis sheet (wages) -Payroll statements and employees’ wages of manufacturing and non-manufacturing.


Miscellaneous costs − Transportation, stocking, storage, infrastructure etc.


The Accounts department calculates the final cost. Calculation takes place after completion of a job.

Profit or loss

Comparison of final cost statement with estimation cost to calculate profit or loss.