The upcoming discussion will update you about the differences between job costing and contract costing.

Difference # Job Costing:

1. Job work is carried in the premises.

2. An order, a unit, lot or batch of product may be taken as cost unit.

3. Cost is first allocated to cost centres and then charged to individual jobs. It is a sys­tem of costing in which the elements of cost are accumulated separately for each job or work undertaken by an organization.


4. The prices of the jobs are fixed basing on the nature of costs and policy of the firm.

5. The duration of the job work is smaller.

6. The value of the job work would be lesser.

Difference # Contract Costing:

1. Contract work is carried at site.


2. Each contract is a cost unit.

3. Most of the expenses are of direct nature and are directly charged to respective con­tract accounts. Only general overheads and head office expenses are apportioned to in­dividual contracts.

4. The pricing is generally through bidding and external forces have major influence in fix­ing the offer price.

5. Generally the contract works will take more time to complete.


6. The contract works are bigger in nature and the value of the contract would also be higher.