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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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Job costing is a costing method that has constituted the central point of many studies conducted by various researchers.

Drury (1992) has described the procedures used in a job costing system and the accounting entries necessary to record the transactions taking place in a company using job costing. While analysing the various costing methods, he stated that job costing should be used when the company output is made of various jobs or orders from separate customers; he also stated that there are two alternative ways of designing a job costing system: either as an integrated cost accounting system or as an interlocking cost accounting system. These systems will be explained later in the chapter.

Drury (1992) advocated the use of an integrated cost accounting system as this reduces or avoids the duplication of records as found in an interlocking system.

Lucey (1993) also examined the mechanics of a costing system where job costing is employed. He first stated that this system must be used where the work to be performed is on customer's requirements. Secondly, this system must be based on good records obtained from production, works documentation, material and labour bookings. The documents used here are the Material requisition forms, time tickets and the job cost sheet. Once prime costs have been gathered, overheads must be charged to jobs and this can be done using either the Traditional methods based on the labour or machine hours overhead absorption rates or using the cost drivers rates of an activity-based system. He finally pinpointed that, for profits to be derived from a job costing system, it will depend on the costing technique used.

Garrison and Noreen (2003) also contribute in the advancement of the knowledge on job costing. They first identified the type of industries where job costing can be used, namely: furniture, manufacturing, hospitals or legal firms. These are industries where the companies offer a wide variety of products or services.

From their point of view, material requisition forms, labour time tickets must be used for the assignment of direct materials and labour to the various jobs; then concerning the manufacturing overheads, they must be assigned using he predetermined overhead rates. The predetermined overhead rates generally use labour or machine time as the allocation bases.

They finally make a point in illustrating the flow of costs in a job costing system, from the raw materials to the foods sold.


As a product costing method, job costing has been mentioned in various studies conducted by some researchers exploring the topic of product cost determination.

One of them, Gorpinpaitoon21(*) (1982) made a study on the use of job costing in the shipbuilding industry in Thailand.

His study was aimed at examining the costing method used by shipbuilding firms in Thailand in order to ascertain the principle, the costing method and its problems. This study was made through direct observation of the actual operations and the interviews of the personnel involved in that industry.

At the end of the study, it was realised that the costs of direct materials and direct labour are charged to the job, but factory overheads are accumulated and allocated to each job on the basis of direct labour cost or as a percentage of work finished.

Ngu22(*) (1997) conducted a study on the topic of product cost and in it, he identified importance of a product cost to the decision making process of the company. The data used were got from primary and secondary sources and had been analysed using quantitative and qualitative means. In the study, he made the point to differentiate the various costing methods that can be used to come out with the product cost among which job costing. The study revealed that companies making one of a kind or special order products use job costing.

The study finally showed that it is very important to determine the cost of a product as this is of great importance to the decision making process of the company.

* 21 Gorpinpaitoon, S., (1982), Job Order Cost System for Ship Building Industry in Thailand, Master thesis.

* 22 Ngu, S.D. (1997), Product Costing : An aid to Management decision Making, the case of CDC, Research Project, university of Buea

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