Difference Between Job Costing And Contract Costing

Difference Between Job Costing And Contract Costing

The main dissimilarities or difference between job order costing and contract costing can be pointed out as follows:

1. Meaning

Job Costing: It is a costing method used to determine the cost of specific work.

Contract Costing: It is a costing method used to determine the cost of specific contract or construction work.

2. Size Of Job

Job Costing: Generally jobs are smaller in size

Contract Costing: Jobs are big and complex

3. Time/Period

Job Costing: Work can be completed in short time.

Contract Costing: It requires longer time for completion of work.

4. Cost/Expenditure

Job Costing: Less expenditure required

Contract Costing: It requires huge expenditure

5. Location/Premises 

Job Costing: Job is performed inside a factory or within the premises.

Contract Costing: Job is performed outside the factory in construction site.

     

Also Read: 

Difference Between Job Costing And Process Costing

6. Payment

Job Costing: Payments are made immediately after the completion of work.

Contract Costing: Payments are made in installment.

7. Transfer of Job

Job Costing: Job cannot be transferred to other parties.

Contract Costing: Some part of contract can be given to other parties or other sub-contractors.

Job Costing Vs Contract Costing (Comparison Chart)

Basis For Difference	Job Costing	Contract Costing
Introduction	Costing method that records the costs of certain work	Costing method that records the costs of specific contract
Job Size	Smaller	Bigger
Time	Short	Long
Cost Required	Less	More
Premises/Location	In the factory	Outside the factory
Payment	Full payment after the completion of job	In installment
Transfer Of Job	Jobs cannot be transferred	Can be transferred

I hope this post is helpful to understand the difference between job costing and contract costing and to make comparison between them.