Job Cost Accounting Helps In Management of Costs

2007-11-14 14:43:46

( Computers )



If you want to accumulate and analyze the cost of labor and equipment as well as product information of your ongoing project, such as a construction project or job orders, you would need special records and detailed accounts. To do this, you can hire an accountant who do the job cost accounting work, or you may use a job costing software.

Job cost accounting is a fundamental part of most accounting systems. It helps you control costs because you can continuously determine labor and equipment costs, along with job outputs; the job cost accounting process also involves analysis of the data and preparation of a summary of the results. You would not only be concerned with costs but also with the determinants of cost, such as labor-hours, equipment-hours, and amounts of work accomplished. Job cost accounting allows you to regularly obtain reliable, time-average production information.

You would want a job cost accounting system which presents balanced and detailed information. If it's too general, it will not provide the cost details crucial to meaningful management control. Excessive detail, on the other hand, will result in being buried in masses of data, which can delay the preparation of the needed information and obliterate your cost-management objective. You must find a system that will suit your own particular mode of project operation.

You may have to look for a job cost accounting format that satisfies the requirements of your project cost control. Good job costing software may do this job for you, or may make it easier for your employee to track your day-to-day expenses for your projects. You would want job cost software that organizes your cost data in accord with the project cost control budget. Comparisons of actual cost performance versus budgeted costs can be made only when both cost categories are accumulated, classified, summarized, and presented in identical formats.


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