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Job Order Cost System - characteristics For example each...

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JOB ORDER COST SYSTEM Under a  job order cost system , the company assigns costs to each  job  or to each  batch  of goods. An  example of a job is the manufacture of a mainframe computer by  IBM , the production of a movie by  Disney , or the making of a fire truck by  Western States . An example of a batch is the printing of 225  wedding invitations by a local print shop, or the printing of a weekly issue of  Fortune  magazine by a  hi-tech printer such as  Quad Graphics . Companies may complete jobs or batches to fill a specific  customer order or to replenish inventory. An important feature of job order costing is that each job or batch has its own distinguishing 
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Unformatted text preview: characteristics. For example, each house is custom built, each consulting engagement by a CPA firm is unique, and each printing job is different. The objective is to compute the cost per job. At each point in manufacturing a product or providing a service, the company can identify the job and its associated costs. A job order cost system measures costs for each completed job, rather than for set time periods. Illustration 15-1 shows the recording of costs in a job order cost system. Illustration 15-1 Job order cost system...
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