Building Strong Brand Equity
Strategic brand management’s goal is to develop strong consumer based brand equity. To reach these goal companies have to design and execute well thought marketing programs. However, task does not end at executing marketing programs, companies to have to construct brand equity measurement system to understand the impact of on consumer mind. One thing to […]
Confirmation Bias in Behavioral Finance
The vast majority of investors fail to perform well in the stock market because of behavioral and emotional reasons. The presence of financial knowledge or the lack of it does not make a huge difference. Instead, it is the behavioral biases that turn out to be the crucial deciding factor. Hence, it is imperative for […]
Implications of Emerging Trends in Tourism for Developing Countries and Societies
Profitable Tourism and the Implications for Corporates and Societies It is a known fact that Tourism is a money spinner for any country that has abundant tourist destinations. The market for worldwide tourism runs into the Billions of Dollars and all nations are eager to grab as much market share as possible. Further, Tourism is […]
Personal Grooming Tips for Women
Personal grooming refers to an art which helps individuals to clean and maintain their body parts. Human beings need to wash, clean their body parts to look good and for personal hygiene as well. Personal grooming helps in enhancing an individual’s self esteem and also goes a long way in developing an attractive personality. Personal […]
Role of Communication in Employee Behaviour
Communication is one of the most essential factors influencing employee’s behaviour. Employee’s perception towards the organization and their team manager determines their behaviour. Communication enables employees to understand what their organization wants them to do? Communication helps in changing an individual’s attitude and thought process. Managers need to know whether their team members are facing […]
Law firms all across the world practice job costing. Most law firms charge an hourly rate to their clients. This rate is derived on the basis of the same factors direct material, direct labour as well as overheads. In case of law firms, the direct material used is negligible. The majority of the hourly rate signifies the expenses that have to be paid as salaries to the employee lawyers. The overheads required for maintaining the office and shared facilities is split amongst clients based on an estimated overhead.
Movie studios like Walt Disney also follow job costing. Every movie that they produce is a specific job. They allocate costs based on the material and labour that has spent while creating the movie. The tough part is to apportion the cost of equipment, studios and other such shared facilities amongst the various jobs that are being performed i.e. the movies that are being produced.
The cost of Medicare has been a major concern all over the world, of late. This has prompted many hospitals to have a closer look at their costs. Most medical service providers are using job costing to do so. A rational allocation of costs is the only way that costs can be brought down for certain ailments. Proper apportioning of costs ensures that people who common in for medication for common flu do not have to pay for the overheads incurred as a result of having equipment for major diseases like cardiac arrests, strokes, kidney failure etc.
The big 4 accounting firms have always used job costing to bill their clients. Their model is very similar to that of the law firms. With accountants too, the cost of material is negligible. Labour costs can be ascertained fairly easily. The real difficulty is to apportion the overheads amongst varios clients.
Companies that build custom software for clients also use job order costing systems. Most accept a fixed rate project, while some clients insist on time and material. However, the majority of expenditure in a software firm is overheads. These need to be apportioned fairly amongst the different clients.
Service firms have led to the development of job costing procedures. Earlier materials were the major component of costs and could be easily tracked. However, keeping a track of the amount of labour spent on different jobs and their productivity has been the result of the efforts of service firms. Some of their methods and procedures have been adopted by the manufacturing sector too. This has led to increased productivity.
Your email address will not be published. Required fields are marked *
