Job order costing (JOC) is the first cost accounting system covered in the course. JOC is used by both service companies and manufacturing companies as a method to accumulate client/product costs. JOC is appropriate when a service or production run has clear start and stop points. The gross profit of the job is calculated by subtracting the job costs from the revenue received from the job.

The important concepts to remember are the flow of costs through the production process and the associated journal entries using T-accounts as a visual representation.

Can a company lose money on a product using job order costing? Explain.