Job order costing is an approach to costing that estimates costs for specific customer orders because the orders vary from customer to customer.

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Job order costing is also known as job costing or job cost accounting, and it is used to accumulate and track the costs of producing a unique product or service. Each job or customer order is treated as a separate cost unit, and the costs are assigned to each job based on the materials, labor, and overhead used to produce it. This approach is typically used in industries such as construction, custom manufacturing, and professional services where each project or order is unique and requires customized pricing and costing.

Job Order Costing Is an Approach to Costing That Estimates