Job order Costing Example

This video shows an example of how Job-order Costing is used to calculate the total cost and per-unit cost of a job.

With Job-order Costing, the cost of a job (for a manufacturer that uses a traditional costing system) includes:
1. the cost of direct materials used
2. the cost of direct labor incurred
3. the cost manufacturing overhead applied

These costs would be added on a job cost sheet to show the total production costs for the job. The total cost would then be divided by the number of units produced by the job to calculate the cost per unit.
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