POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

OPEN UNIVERSITY SYSTEM

MASTER OF SCIENCE IN CONSTRUCTION MANAGEMENT

CM653 CONSTRUCTION COST MANAGEMENT

JOB ORDER COSTING

Group No. 1

Submitted by
Fajardo, Eithne Dennise R.

Submitted to

DR. LUTZER REYES

Course Specialist

2020

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1. DETAILS OF THE REPORT:

Job Order Costing is a costing method widely used in the construction industry, where in the
totality of the prooject is broken down into smaller items or more specific tasks. In short
terms, costs, are accumulated by job. In a jo order syatem, collecting costs by job provides
vital information for the management. This particular tyoe of costing focuses more on
determining the actual cost of the project then inserting the overhead cost along with the
profit margin on the latter parts. This is particularly helpful in dealing with change orders
and finalizing punchlists.

In this report, job order costing system is divided into two parts whch is the actual cost and
the overhead. Actual cost defined is the actual cost of the project or the basic cost without
the overhead. This is subdivided into two (2) groups which are: 1) Actual Material Cost and
the 2) Actual Labor Cost. Overhead on the otherhand, is defined as the project expenses
that are paid on an going basis, it is usually priced proportionately against the project.
Projects require taxes, rents and other costs not part of labor and materials. This shows that
when running a business in the construction industry, there is more to it that labor and
materials that should be taken into account.

In practice, the Bill of Quantities are subdivided into groups per area of tasks and then
broken down into detailed tasks per line item. Overhead allocation are then inserted after
determining the direct cost of the material and labor. The BOQ serves as the take off of the
costs particular.

Material Cost

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2. REFERENCES:

1.

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