What is a job order cost system?
You have two basic types of manufacturing processes- continuous and discrete or job shop. A job order cost is based upon the direct materials/components and direct labor associated with making this specific final product. You would tyoically add manufacturing overhead and profit to this cost (a build up) to get to fully loaded costing and pricing. A job order cost system can be standard cost based or an actual cost build-up (time and materials) if you are making custom units.
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