Job costing is the process of tracking costs associated with a specific job, order, or batch of products. It includes direct materials, labor, and allocated overhead. This method is particularly relevant for custom manufacturing and project-based industries where costs vary widely between orders. Accurate job costing supports inventory optimization by helping supply chain managers identify which products or orders consume the most inventory resources. It also informs pricing, profit analysis, and inventory valuation. Discrepancies in job costing can indicate inefficiencies or unaccounted inventory losses. Integrated inventory management systems can automatically track inventory usage against specific jobs using barcoding, RFID, or IoT sensors. This visibility enables more precise cost allocation, highlights waste areas, and informs future purchasing or production planning strategies, ensuring that inventory is used efficiently and profitably.
