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The Job Cost System provides a
means to capture and maintain costs for Jobs entered in the system. Job
costing keeps track of Labor costs, Material costs, Subcontract cost and
Overhead costs for every job. The Job Cost System is user definable to
capture Actual Costs or Standard Costs by department.
The Job Cost System utilizes a true work-in-process system to handle
costs. Actual/Standard Cost. Labor, Material and Overhead costs are
captured and maintained in the work in process system by either actual or
standard costing methods. Costing can be set up by Department to operate
as actual or standard cost.
This gives the shop the capability to have jobs in the shop with some
using actual cost and others using standard cost. This feature provides
the ability to cost for different repair environments such as – Outside
Service, Motor Repair, Servo Motor Repair, Contract Machine Work,
Electronic Repair or Contract Repair Work along with many other cost
areas.
There has been much criticism too about the job cost system. The job cost
system which was considered to be impenetrable is on the threshold of
falling. The complexity and unfamiliarity of this system has caused
frustrations to auditors, since they don’t know what they should be look
for, internal accounting errors are being overlooked.
Contractors have never been that much concerned about the accuracy of the
job cost system because, for the most part, it wasn’t put under a bright
government spotlight. Now, with specialized training, IRS auditors are in
a better position to understand how the Job cost system fits together.
They will also be able to understand percentage of competition accounting.
A lot is going to depend on the Court’s decree. How long they will allow
goods to last before they come materials is a very vital question. Paving
contractors are certainly going to use this to support their use of cash
method. Cement contractors may use this as a precedent, so can those
contractors whose suppliers are short-lived. But no one for now knows how
broad is this debate going to be, but one thing is certain this is not the
end of cash-basis debate. But this is going to draw a line in the IRS’s
ability to challenge the use of the cash-method.
Job Cost
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