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The use of job costing as a tool for the pricing and cost control decisions in the printing industry: the case of Société de Presse et d'Editions (SOPECAM)

par Christian Kuiate Sobngwi
University of Buea - Bachelor of Science 2003

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This study is concerned with the method of applying job costing to the accounting procedures of SOPECAM. In the process of using job costing, we shall take two approaches to the costing exercise, namely the variable and absorption costing approaches. This simply means that we are interested in studying a particular costing method and its use under two costing techniques; we must therefore first of all understand what is meant by costing methods and costing techniques and how they differ from each other.


Lucey (1993) defines costing methods as the methods of costing designed to suit the way goods are processed or manufactured or the way that services are provided. It therefore refers to the various methods that can be used to come out with the cost of an activity. It appears that the costing method must suit the product or service to cost. This is the reason why we may have two broad categories of costing methods, namely:

1. Specific order costing:

This is a costing method applicable where the work consists of separate jobs or batches. The main sub-divisions of specific order costing are: job costing, contract costing and batch costing.

2. Continuous operation or process costing:

This costing method applies where the goods or service produced result from a sequence of conditions or repetitive operations or processes to which costs are charged before being averaged over the units produced during the period. Its main sub-divisions are: process costing including joint product and by-product, and service/function costing.

a) Job costing

This is a traditional method of accounting for cost. This is a method where the costs incurred are allocated, apportioned and absorbed by the cost unit, which is the object to cost.

Here the company production is divided into jobs, which may be of the same nature, but generally they are all different. The purpose here is to determine the profit made on each job, as this will be helpful for future planning.

b) Batch costing.

Being another type of specific order costing method, it is one which applies when a quantity of identical items are manufactured as a batch. It is very similar to job costing but the main feature of batch costing is that the unit cost is the ratio of the total cost of the batch to the number of units in the batch. This method is widely used in the footwear and clothing industries where similar items are manufactured.

c) Process costing.

This is a costing method, which is used when the production is essentially made of homogenous products, which are being produced on a continuous basis. It is very close to job costing in that:

· They have the same basic purposes, the determination of the unit cost.

· They use the same basic accounts

· The flow of costs through these accounts is quite the same for the two methods.

The differences are due to two main factors:

· In process costing the flow of units is quite continuous while job costing is concerned with separate and distinct processes.

· Under process costing there is no need to try to identify materials, labour or overhead costs with particular order since that order is only part of the many that continuously flow.

Now that we know the different methods that can be used to build a company costing system, we must now determine the techniques to be employed depending on the destination of the output information.

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