Definition and explanation
Job cost sheet is a complete sheet, which is prepared by the factory accountant for every job started in the factory. It is a primary document for accumulating all costs related to a particular job. In a job order costing system, we maintain a job cost sheet for each job. It tells 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. Following information normally appears in a particular job cost sheet.
- Job Number (It is a number, assigned to each job by the factory accountant)
- Date started (When the job is started)
- Date completed (When the job is completed)
- Description (It’s a complete name of the product which is to be manufactured)
- Number of units completed
- Total cost of raw material (With date, requisition #, quantity and rate)
- Total cost of Direct labor (With time card #, labor hours, rate)
- Total applied manufacturing overhead (With activity base, quantity and application rate)
- Cost summary (Total cost of material, labor and manufacturing overheads for particular job an cost per unit)
- Shipping summary (How many units have been sold and how many are in stock with cost)
Advantages of a job cost sheet
- It shows the total cost and cost per unit of the product produced during the given period.
- It helps the producers to control over the cost of production.
- It acts as a guide to the manufacturers and helps them in formulating a definite and profitable production policy.
- It helps the management in fixing up the selling price of their products.
- It helps management in the comparative study of the various elements of cost with the past result and standard cost.
Format of job cost sheet
John Textiles is one of the large-scale garments factories in the USA. The company receives the orders and the production is done according to the customer’s requirements. For costing purpose, company’s accounts department uses the job order costing.
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 one was for 1,500 Trousers (40″). Company’s operation department assigned the following job numbers to these orders.
1,000 T-Shirts Job No. 303
1,500 Trousers Job No. 304
Following transactions have been recorded during the completion of these two orders.
Machine was used for job # 303 and 304, 200 hours and 750 hours respectively.
On November 25, both jobs have been completed and transferred to the storeroom. On November 28, both the orders shipped to the customer on account at the following prices.
T-Shirts (14″) $170 per shirt
Trousers (40″) $210 per trouser
- Enter the above data in the general journal.
- Prepare the job sheets for both the jobs. (Marketing and administration expenses were $15 per unit in job # 303 and $10 per unit in job # 304).
Job Cost Sheets for Job # 303 and 304: