{"id":3432,"date":"2020-02-20T06:29:15","date_gmt":"2020-02-20T06:29:15","guid":{"rendered":"https:\/\/commerceiets.com\/?p=3432"},"modified":"2020-02-20T06:29:15","modified_gmt":"2020-02-20T06:29:15","slug":"job-costing-vs-contract-costing","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/job-costing-vs-contract-costing\/","title":{"rendered":"DIFFERENCE BETWEEN JOB COSTING AND CONTRACT COSTING"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_72 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/job-costing-vs-contract-costing\/#JOB_COSTING_VS_CONTRACT_COSTING\" title=\"JOB COSTING VS CONTRACT COSTING\">JOB COSTING VS CONTRACT COSTING<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/job-costing-vs-contract-costing\/#JOB_COSTING\" title=\"JOB COSTING\">JOB COSTING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/job-costing-vs-contract-costing\/#CONTRACT_COSTING\" title=\"CONTRACT COSTING\">CONTRACT COSTING<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"has-text-align-center wp-block-heading\" id=\"job-costing-vs-contract-costing\"><span class=\"ez-toc-section\" id=\"JOB_COSTING_VS_CONTRACT_COSTING\"><\/span><strong>JOB COSTING VS CONTRACT COSTING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"238\" height=\"212\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/01\/download-47.jpg\" alt=\"\" class=\"wp-image-5097\"\/><figcaption>JOB COSTING VS CONTRACT COSTING<\/figcaption><\/figure>\n\n\n\n<p>The difference between <a aria-label=\"Job Costing (opens in a new tab)\" href=\"https:\/\/commerceiets.com\/job-costing\/\" target=\"_blank\" rel=\"noreferrer noopener\">Job Costing<\/a> VS <a aria-label=\"Contract Costing (opens in a new tab)\" href=\"https:\/\/commerceiets.com\/contract-costing\/\" target=\"_blank\" rel=\"noreferrer noopener\">Contract Costing<\/a> is as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>\n  <strong>BASIS\n  OF DIFFERENCE<\/strong>\n  <\/td><td>\n  <strong>JOB\n  COSTING<\/strong>\n  <\/td><td>\n  <strong>CONTRACT\n  COSTING<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>MEANING<\/strong>\n  <\/td><td>\n  Job costing is a system&nbsp;used for\n  completion of specific customer orders where each unit produced is considered\n  a job.\n  <\/td><td>\n  Contract costing is a costing system where\n  work is undertaken according to special requirements of customers in a\n  location specified by the customer.\n  <\/td><\/tr><tr><td>\n  <strong>AREA\n  OF WORK<\/strong>\n  <\/td><td>\n  Job costing generally calculate the cost\n  for a single or a few products.\n  &nbsp;\n  <\/td><td>\n  Contract costing is used to calculate the\n  cost for significant scale projects.\n  <\/td><\/tr><tr><td>\n  <strong>TIME\n  PERIOD<\/strong>\n  <\/td><td>\n  A job usually spans over a small period of\n  time, thus job costing can be completed within a short period of time.\n  <\/td><td>\n  The work of a contract progresses for a\n  long period time, thus contract costing is conducted within an extended time\n  period.\n  <\/td><\/tr><tr><td>\n  <strong>PLACE\n  OF WORK<\/strong>\n  <\/td><td>\n  The product is completed within the\n  premises of the company in a job.\n  <\/td><td>\n  Production or construction takes place in\n  construction site selected by the customer.\n  <\/td><\/tr><tr><td>\n  <strong>TRANSFER\n  OF PROFIT<\/strong>\n  <\/td><td>\n  When a job is done and finished goods are\n  sold to the customer, the entire profit will be transferred to profit and\n  loss account.\n  <\/td><td>\n  In contract costing, costs and revenues are\n  recorded in proportion to the degree of completion and the resulting profit\n  is transferred to profit and loss account.\n  <\/td><\/tr><tr><td>\n  <strong>SIZE\n  OF JOB<\/strong>\n  <\/td><td>\n  Generally jobs are smaller\n  in size.\n  <\/td><td>\n  Jobs are big and complex.\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  <strong>COST\/\n  EXPENDITURE<\/strong>\n  <\/td><td>\n  &nbsp;Less expenditure\n  required.\n  <\/td><td>\n  It requires huge\n  expenditure.\n  <\/td><\/tr><tr><td>\n  <strong>PAYMENTS<\/strong>\n  <\/td><td>\n  Payments are made\n  immediately after the completion of&nbsp;&nbsp;work.\n  <\/td><td>\n  Payments are made in installment.\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  <strong>TRANSFER\n  OF JOB<\/strong>\n  <\/td><td>\n  Job cannot be transferred\n  to other parties.\n  <\/td><td>\n  Some part of contract can be given to other parties or\n  other sub-contractors.\n  <\/td><\/tr><tr><td>\n  <strong>SUITABILITY<\/strong>\n  <\/td><td>\n  Job costing is suitable\n  for the manufacture of products under the customer\u2019s specifications.<br \/>\n  <br \/>\n  <br \/>\n\n  <\/td><td>\n  Contract costing is suitable for construction works.\n  <\/td><\/tr><tr><td>\n  <strong>VALUE\n  OF WORK<\/strong>\n  <\/td><td>\n  The value of work is less.\n  <\/td><td>\n  The value of work is more.\n  <\/td><\/tr><tr><td>\n  <strong>ACCOUNT<\/strong>\n  <\/td><td>\n  In job costing, we make\n  job account for every job. In this account, we show different expenses which\n  are paid for completing that job.&nbsp;\n  <\/td><td>\n  In contract costing, we open contract account for every\n  contract. In this account, we show all expenses relating to contract and it\n  also show work in progress in the form of work certified and work\n  uncertified. Difference of credit and debit side of this account will show\n  notional profit or loss.&nbsp;\n  <\/td><\/tr><\/tbody><\/table><figcaption>JOB COSTING VS CONTRACT COSTING<\/figcaption><\/figure>\n\n\n\n<h3 class=\"has-text-align-center wp-block-heading\" id=\"job-costing\"><span class=\"ez-toc-section\" id=\"JOB_COSTING\"><\/span><strong>JOB COSTING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Job costing or job order costing also called specific order\ncosting is a method of costing which is used when work is undertaken as per the\ncustomer\u2019s special requirement (tailor-made).<\/p>\n\n\n\n<p><strong>ACCORDING TO\nINSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS, LONDON<\/strong><\/p>\n\n\n\n<p>\u201cJob costing is that form of specific order costing which\napplies where work is undertaken to customer\u2019s specific requirements and each\norder is of comparatively of short duration.\u201d <\/p>\n\n\n\n<p>Under this method of costing, each job is considered to be a\ndistinct cost unit. As such, each job is separately identifiable. In the case\nof a job, work is usually carried out within the factory or workshop.\nSometimes, a job is accomplished even in the customer\u2019s premises.<\/p>\n\n\n\n<p>Job costing is employed in the following cases:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Where the production is against the order of the\ncustomer or jobs are executed for different customers according to their\nspecifications.<\/li><li>Where each job needs special treatment and no\ntwo orders are necessarily alike.<\/li><li>Where there is no uniformity in the flow of\nproduction from one department to another.<\/li><li>Where the work-in-progress differs from period\nto period on the basis of the number of jobs in hand.<\/li><\/ul>\n\n\n\n<p>Job costing is applicable to printing, furniture, hardware,\nship-building, heavy machinery, foundry general engineering works, machine\ntools, interior decoration, repairs and other similar work.<\/p>\n\n\n\n<h3 class=\"has-text-align-center wp-block-heading\" id=\"contract-costing\"><span class=\"ez-toc-section\" id=\"CONTRACT_COSTING\"><\/span><strong>CONTRACT COSTING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Contract costing is also known as Terminal Costing. It is\none form of application of the principles of job order costing. Contract\nCosting is a type of costing used in constructional activities such as\nconstruction of buildings, roads, bridges etc. The person who takes contract\nfor a price is called the Contractor and the person from whom it is taken is\ncalled the Contractee.<\/p>\n\n\n\n<p><strong>ACCORDING TO\nCHARTERED INSTITUTE OF MANAGEMENT ACCOUNTANTS, LONDON<\/strong><\/p>\n\n\n\n<p>\u201cContract costing is a form of specific order costing in\nwhich costs are attributed to individual contracts.\u201d<\/p>\n\n\n\n<p>In contract costing each contract is treated as a cost unit and costs are ascertained separately for each contract. Usually, there is a separate account for each contract. <\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/cost-accounting\/\">Cost Accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-cost-accounting-pdf\/\">Scope of cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/elements-of-cost\/\">Elements of cost<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/types-of-cost\/\">Types of cost<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/material-control-in-cost-accounting-pdf\/\">Material control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perpetual-inventory-system\/\">Perpetual inventory system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/pricing-of-materials\/\">Pricing of materials<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/bin-card\/\">Bin Card<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/store-ledger\/\">Stores Ledger<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/incentive-plans\/\">Incentive plans<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/overhead\/\">Overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-treatment-of-idle-time\/\">Idle time<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/system-of-wage-payment-in-cost-accounting\/\">System of wage payment in cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-time-rate-system-and-piece-rate-system\/\">Time rate vs piece rate wage system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-centre\/\">Cost Center<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/labor-turnover\/\">Labour Turnover<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\">Difference between management accounting and cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/allocation-and-apportionment-of-overheads\/\">Allocation and apportionment of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-allocation-and-apportionment-of-overheads\/\">Allocation vs Apportionment of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/absorption-of-overheads\/\">Absorption of overheads<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/over-absorption-and-under-absorption-of-overheads\/\">Over absorption and under absorption of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/activity-based-costing\/\">Activity based costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-traditional-costing-and-activity-based-costing\/\">Traditional costing vs ABC system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/reconciliation-of-accounts\/\">Reconciliation of accounts<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/unit-costing\/\">Unit costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-sheet-format\/\">Cost sheet format<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-sheet-vs-production-account\/\">Cost sheet vs production sheet<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/job-costing\/\">Job costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/batch-costing\/\">Batch Costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-job-costing-and-batch-costing\/\">job costing vs batch costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/contract-costing\/\">Contract costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-job-costing-and-contract-costing\/\">Job Costing vs Contract costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/process-costing\/\">Process Costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-costing-vs-job-costing\/\">Process costing vs job costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/joint-products\/\">Joint products<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/by-products\/\">By Product&nbsp;<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/equivalent-production\/\">Equivalent production<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/marginal-costing\/\">Marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/applications-of-marginal-costing\/\">Application of marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-volume-profit-analysis\/\">Cost volume profit analysis<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/tools-and-techniques-of-marginal-costing\/\">Tools and techniques of marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/budget\/\">Budget<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/break-even-point\/\">Break even point<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-of-budgetary-control\/\">Process of budgetary control<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/explain-the-advantages-and-limitations-of-budgetary-control\/\">Advantages and limitations of budgetary control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/budgetary-control\/\">Budgetary Control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/\">Zero base budgeting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/standard-costing\/\">Standard Costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/variance-analysis\/\">Variance Analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-standard-costing-and-budgetary-control\/\">Standard costing vs budgetary control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\">Management accounting vs cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-financial-accounting-management-accounting-and-cost-accounting\/\">Cost accounting vs financial accounting<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"238\" height=\"212\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/01\/download-47.jpg\" alt=\"JOB COSTING VS CONTRACT COSTING\" class=\"wp-image-5097\"\/><figcaption>JOB COSTING VS CONTRACT COSTING<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>JOB COSTING VS CONTRACT COSTING The difference between Job Costing VS Contract Costing is as follows: BASIS OF DIFFERENCE JOB COSTING CONTRACT COSTING MEANING Job costing is a system&nbsp;used for completion of specific customer orders where each unit produced is considered a job. Contract costing is a costing system where work is undertaken according to&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/job-costing-vs-contract-costing\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;DIFFERENCE BETWEEN JOB COSTING AND CONTRACT COSTING&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":3435,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[187,56],"tags":[],"class_list":["post-3432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cost-accounting","category-difference-between"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3432","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=3432"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3432\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/3435"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=3432"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=3432"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=3432"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}