Sample Essay

The Job order cost system helps in identifying and evaluating the individual cost components associated with a particular job. These component costs can be accumulated to estimate the total cost required for a particular project or job.

A company can estimate the price of a project based on this manufacturing cost by applying a certain profit margin above the level of manufacturing cost. This phenomenon of pricing is referred to as cost-plus pricing. Sprinturf can use the job cost information to estimate the total cost of the field being installed in the high school. If the total cost of the project is less than $600,000 then Sprinturf will accept the proposal and if the cost is higher than the price offered by the school the proposal will be rejected.

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