FinTech Glossary

What Is Job Costing

Job costing is an accounting method used to track and allocate costs to specific jobs, projects, or contracts, helping determine the actual cost and profitability of individual assignments.

Business Context

Job costing is commonly used by businesses that deliver customised work rather than standardised products.

Industries such as construction, manufacturing, consulting, repair services, and advertising rely on job costing to understand how resources are consumed per job.

It enables accurate tracking of expenses at a granular level instead of spreading costs across the entire business.

Key Cost Components in Job Costing

Job costing typically includes:

1. Direct labour costs associated with the job
2. Direct material costs used specifically for the job
3. Overheads allocated based on predefined rules
4. Third-party or service expenses linked to the job

Accurate allocation ensures reliable cost analysis.