Job Cost Sheet: Definition and Explanation
A job cost sheet is a complete sheet prepared by the factory accountant for every job started in the factory. It is an important document for accumulating all costs related to a particular job.
In a job order costing system, a job cost sheet is maintained for each job. It shows information about the total cost of a particular job. Each job sheet breaks the costs down in terms of direct materials, direct labor, and manufacturing overhead assigned to individual jobs.
The following information typically appears in a job cost sheet:
- Job number (a number assigned to each job by the factory accountant)
- Date started
- Date completed
- Description (the complete name of the product to be manufactured)
- Number of units completed
- Total cost of raw materials (with date, requisition number, quantity, and rate)
- Total cost of direct labor (with time card number, labor hours, and rate)
- Total applied manufacturing overhead (with activity base, quantity, and application rate)
- Cost summary (total cost of materials, labor, and manufacturing overheads for a particular job and cost per unit)
- Shipping summary (number of units sold, number of units in stock, and cost data)
Advantages of a Job Cost Sheet
- Shows the total cost and cost per unit of the product produced during the given period.
- Helps producers to control production costs.
- Acts as a guide to manufacturers, helping them to formulate a definite and profitable production policy.
- Helps the management to determine product prices.
- Helps the management to compare various elements of cost to previous results and standard costs.
Format of a Job Cost Sheet
John Textiles is a large garment factory based in the United States. The company receives orders and production is undertaken according to customer requirements. For costing purposes, the company’s accounts department uses a job order costing system.
At the start of November 2018, the company received two orders from Harry Garments. One was for 1,000 t-shirts (14″) and the second was for 1,500 trousers (40″). The company’s operations department assigned the following job numbers to these orders.
- 1,000 T-Shirts: Job No. 303
- 1,500 Trousers: Job No. 304
The following transactions were recorded during the completion of these two orders:
Manufacturing overheads are also given as follows:
The lengths of time that machines were used for Job Nos. 303 and 304 were 200 hours and 750 hours, respectively.
On 25 November, both jobs were completed and transferred to the storeroom. On 28 November, both orders were shipped to the customer on account at the following prices:
- T-Shirts (14″): $170 per shirt
- Trousers (40″): $210 per pair of trousers
- Enter the above data into the journal
- Prepare job cost sheets for both jobs, noting that marketing and administration expenses were $15 per unit for Job No. 303 and $10 per unit for Job No. 304
The job cost sheet for Job No. 303 is shown as follows:
In addition, the job cost sheet for Job No. 304 is given as follows: