Job Costing :
Job Costing applies to specific jobs undertaken according to customer requirements and specifications. Tally Prime enables the tracking of cost and revenue information down to the smallest detail. In order to determine the actual costs incurred, every job is assigned a job number or a job name. Job costing systems determine the costs separately for each product or service, based on the jobs undertaken.
Features:
Many non-standard (customised) products/ service are produced/ rendered.
Orders are executed based on customer requirements.
Cost records are maintained for each distinct job.
Costs are traced or allocated to jobs.
The advantages of Job Costing are as follows.
Costs can be allotted to each element while the job is in progress.
On the completion of a job, each element of cost, selling price and profit can be compared with estimates made earlier and other similar jobs.
Suitable methods can be used to determine the price on a cost plus contract basis.
Q: Computer Associates received two orders from SimplyC Solutions to upgrade existing systems and deliver new systems.
The order details are given in the table.
| S. No. | Order Description | Terms of Contract | Amount |
| 1. | Servicing and Upgrading of existing machines. | Lump sum contract, inclusive of replacement of parts | 425000/- |
| 2. | Installing new systems as per specifications | Rate contract based on requirement of per systems | 20,000/- |
Other Details >
The company has given the servicing and upgrading job collectively to Raj and Archana. The Service Charges amounts of Rs.31,250 and Travel Expenses for visits made onsite are Rs.20,000.
The company has given the job of installing new systems job to Rajesh
Service ChargeRs.31,250 and Travel Expenses for visits made onsite-Rs.20,000.
The company has a stores godown and regularly purchases items from Reliable Computers.
Steps
1. Create New Company using Company Info --> Create Company
2. Enabling Job Costing in Tally Prime :
GOT -->F11: Features
Set Enable Job Costing to Yes.
Each job is identified with a name or number and this is used while creating the cost centre for the job. Create Upgrading Job as a Job Cost Centre under Primary.
Go to Gateway of Tally --> Create --> Show More --> Show Inactive --> Cost Centre
1. Name: Upgrading Job
2. (alias): Skip field
3. Under: Select Primary from List of Cost Centre
4. Use Ctrl+I --> Show More
The completed Cost Centre Creation screen appears as shown below:
Similarly, create the following Cost Centres.
| Name | Alias | Under | Use for Job Costing |
| New Systems Job | Skip Field | Primary | Yes |
Creating Ledgers
Create the following ledger
Similarly, create the following ledgers:
| Name | Under | Maintain balances bill-by-bill | Inventory values are affected | Cost Centres are applicable |
| Sales | Sales Accounts | -- | Yes | Yes |
| Service Charges | Direct Expenses | -- | No | Yes |
| Travel Expenses | Indirect Expenses | -- | No | Yes |
| Reliable Computers | Sundry Creditors | Yes | No | No |
Creating Godowns dedicated to jobs
Godowns are geographical locations or persons responsible for stock handling. Whereas, Dedicated Godowns are created to keep track of stocks transferred, consumed and manufactured for each job.
Create Stores godown
Go to Gateway of Tally --> Create --> Godown/Location
1. Name: Stores
2. (alias): Skip field
3. Under: Primary
Similarly, create the following Godowns with the details given below:
| Godown Name | Under | Allow Storage of materials | Default Job Name |
| Raj | Primary | Yes | Upgrading Job |
| Archana | Primary | Yes | Upgrading Job |
| Rajesh | Primary | Yes | New Systems Job |
Creating Stock Item
* Create stock item as Mother Board Go to Gateway of Tally --> Create --> Stock Items
1. Name: Mother Board
2. (alias): Skip field
3. Under: Select Primary from List of Groups
4. Units: Select Nos from Units list (If does not exist press Alt+c to create.)
5. Rate of Duty: Skip Field
6. Opening Balance: Do not enter any details
Similarly, create the following Stock Items.
| Stock Items | Under | Unit |
| Hard Disk | Primary | Nos |
| Monitor | Primary | Nos |
| CPU | Primary | Nos |
| Keyboard | Primary | Nos |
| Mouse | Primary | Nos |
GOT--> Create--> Inventory Master --> Stock Items
Press F12 for Configuration at Stock Item creation screen and activate the following option
- Set Components List (Bill of Materials) in Stock items : Yes
- Press CTRL + A to accept all
Create Transfer Journal Voucher Type with Voucher Class
Go to Gateway of Tally --> Create --> Voucher Types
1. Enter Transfer Journal as Name of the Voucher Type.
2. Select the Type of Voucher as Stock Journal from the list of voucher types.
3. Type the Abbr. as Transfer.
4. Select the Method of Voucher Numbering as Automatic.
5. By default Use Common Narration is set to Y.
6. Set Use as a Manufacturing Journal to No.
7. Type the Name of Class as Transfer
* After then following screen will appear.
8. Press Enter and set Use Class for Inter-Godown Transfers to Yes.
The completed Voucher Type Creation screen appears as shown below:
9. Press Y or Enter to accept the screen.
Go to Gateway of Tally --> Inventory Info. --> Voucher Types --> Create
1. Enter Consumption Journal as Name of the Voucher Type.
2. Select the Type of Voucher as Stock Journal from the list of voucher types.
3. Type the Abbr. as Consumption.
4. Select the Method of Voucher Numbering as Automatic.
5. By default Use Common Narration is set to Y.
6. Set Use as a Manufacturing Journal to No.
7. Type the Name of Class as Consumption.
8. Press Enter. Set Use Class for Inter-Godown Transfers to No and set Use Class for Job Costing Consumption to Yes.
The completed Voucher Type Creation screen appears as shown below :
9. Press Y or Enter to accept the screen.
Recording Transactions
On the receipt of orders from SimplyC Solutions, buy and store the components required for the execution of jobs.
Q: On 1-4-23, Computer Associates, placed an order with Reliable Computers for the following items :
| Name of Items | Quantity | Rate per Unit | Total Amount |
| Mother Boards | 12 | 3,000/- | 36,000/- |
| Hard Disk | 12 | 4,500/- | 54,000/- |
| Monitor | 22 | 7,500/- | 1,65,000/- |
| CPU | 22 | 2,750/- | 60,500/- |
| Keyboard | 27 | 725/- | 19,575/- |
| Mouse | 27 | 250/- | 6,750/- |
Create Receipt Note:
Go to GOT--> Voucher--> Receipt Note (Ctrl+F9) to view Receipt Note entry screen
1. Press F2 to change voucher date. Type 1-4-2018.
2. In the Party’s A/c Name select Reliable Computers from the List of Ledgers Accounts.
3. Press Enter to view the order details screen and accept the default screen.
4. In the Purchase Ledger field, select Purchases from the List of Ledger Accounts.
5. Select Mother Boards from List of Items.
6. The Item Allocation screen appears.
Enter the details as shown below:
* Tracking No: Select 1 (from List of Track-ing Numbers)
* Godown: Stores
* Quantity: 12 Nos Rate: 3,000/- Amount: 36,000/-
The completed Receipt Note appears as shown below :
7. Press Y or Enter to accept the screen
Creating Purchase Invoice On 2-4-23, received a purchase bill from Reliable Computers for the supply booked.
Create Purchase Invoice
Go to Gateway of Tally--> Voucher--> F9: Purchase
1. Press F2 and change the date to 2-4-2023.
2. Enter the Supplier Invoice No. and Date.
3. In the Party’s A/c Name select Reliable Computers from the List of Ledgers Accounts.
4. In the Receipt Details screen, select 1 from the List of Tracking Numbers.
5. In the Purchase Ledger field select Purchases from the List of Ledgers Accounts.
6. In the Bill-Wise Details screen, Select New Ref
Type the name as RC1
Enter the amount as Rs.3,4,1825/-
7. Press Y or Enter to accept the screen
View Godown Summary Go to Gateway of Tally--> Display More Report--> Inventory Book--> Godown/Location
Select Primary
Press Alt+F1 to view the Godown Summary of Stocks. The Godown Summary appears as shown below:
Creating Transfer Journal
Computer Associates has employed Raj and Archana. The following components have been issued to them on 4-4-2023 for the upgrading job.
Details of Stock issued to Raj :
| Name of Items | Godown | Quantity | Rate per Unit | Total Amount |
| Mother Boards | Stores | 6 | 3,000/- | 18,000/- |
| Hard Disk | Stores | 6 | 4,500/- | 27,000/- |
Details of Stock issued to Archana :
| Name of Items | Godown | Quantity | Rate per Unit | Total Amount |
| Mother Boards | Stores | 6 | 3,000/- | 18,000/- |
| Hard Disk | Stores | 6 | 4,500/- | 27,000/- |
Create Transfer Journal
1. Go to Gateway of Tally--> Vouchers--> press Alt + F7
2. Select Transfer Journal as Voucher Type and Class as Transfer
3. Press F2 and change the date to 4-4-2023.
4. Select Raj as the Destination Godown/Location
5. Enter the details as shown below :
6. The Rate and Amount are automatically displayed.
7. Press Y or Enter to accept the screen.
Similarly, make an entry in a Transfer Journal, selecting Archana as the Destination Godown and ensure that the date is 4-4-2023.
Creating Consumption Journal:
On 5-4-2023, Raj and Archana found that 8 Systems needed a replacement of Mother Boards and Hard Disk. The respective consumption has to be recorded as a job cost.
| Name of Items | Godown | Quantity | Rate per Unit | Total Amount |
| Mother Boards | Raj | 4 | 3,000/- | 12,000/- |
| Hard Disk | Raj | 4 | 4,500/- | 18,000/- |
| Mother Boards | Archana | 4 | 3,000/- | 12,000/- |
| Hard Disk | Archana | 4 | 4,500/- | 18,000/- |
Create Consumption Journal
Go to Gateway of Tally--> Inventory Vouchers--> press Alt + F7
1. Select Consumption Journal as Voucher Type
2. Select Consumption as Voucher Class
Creating Payment Voucher
On 6-4-23, Computer Associates made a cash payment of Rs. 31,250 as Service Charges and Rs. 20,000 as Travel Expenses, collectively to Raj and Archana. The costs were assigned to Upgrading Job.
Create Payment Voucher
Go to Gateway of Tally--> Vouchers--> F5: Payment
1. Select Cash in the Account field.
2. Select Service Charges from List of Ledger Accounts.
3. Enter 31,250/- in the Amount field
4. Press Enter to view the Cost Allocations screen
5. Select Upgrading Job from List of Cost Centre
6. Select Travel Expenses from List of Ledger Accounts, enter 20000/- in the Amount field and press Enter to view the Cost Allocations screen.
7. Select Upgrading Job from List of Cost Centre.
8. Press Y or Enter to accept the screen
View Godown Summary
Go to Gateway of Tally--> Display--> Inventory Book --> Godown/Location--> Select Primary
Press Alt+F1 to view the Godown summary in detailed format.
In the F12: Configuration, set Show All Items (incl. zero balance) to Yes.
Creating Sales Invoice On 6-4-2023, Raj and Archana successfully completed the upgrading job at SimplyC Solutions. Computer Associates raised an invoice on 6-4-2023 for the upgrading job.
Create Sales Invoice :
Go to Gateway of Tally--> Accounting Vouchers--> F8: Sales(Press Ctrl+H for Account Invoice)
1. In the Party’s A/c Name select SimplyC Solutions from the List of Ledger Accounts.
2. Press Enter to view the Despatch Details screen and accept the default screen.
3. Select Sales from List of Ledger Accounts, enter 4,25,000/- in the Amount field and press Enter once to view Cost Allocations for the Sales screen.
4. Select Upgrading Job from List of Cost Centres.
5. In the Bill-Wise Details for SimplyC Solutions, Select New Ref
Type the Name as SS-1
Enter the amount as Rs. 4,25,000/-
6. Press Y or Enter to accept the screen.
Creating Transfer Journal for Returns of Materials
On 6-4-23, Raj and Archana return the remaining components to the stores having completed the job.
Create Transfer Journal of following details:
| Name of Items | Godown | Quantity | Rate per Unit | Total Amount |
| Mother Boards | Raj | 2 | 3,000/- | 6,000/- |
| Hard Disk | Raj | 2 | 4,500/- | 9,000/- |
| Mother Boards | Archana | 2 | 3,000/- | 6,000/- |
| Hard Disk | Archana | 2 | 4,500/- | 9,000/- |
Go to Gateway of Tally--> Display--> Inventory Book -->Godown/Location--> Select Primary
Press Alt+F1 to view the Godown summary in detailed format.
In F12: Configuration set Show All Items (incl. zero balance) to Yes.
Similarly, record transactions for New Systems Job.
1. On 7-4-2023, the following components are issued to Rajesh from the stores. This is for the installation of New Systems for SimplyC Solutions. The details of Stock issued to Rajesh are given below:| Name of Items | Godown | Quantity | Rate | Amount |
| CPU | Stores | 15 | 2,750 /- | 41,250 /- |
| Monitor | Stores | 15 | 7,500 /- | 1,12,500 /- |
| Keyboard | Stores | 15 | 725/- | 10,875 /- |
| Mouse | Stores | 15 | 250/- | 3,750/- |
Make an entry of the following transaction in Transfer Journal.
Select the Destination Godown as Rajesh.
Ensure the entry is as shown below:
Make an entry of the transaction in a Manufacturing Journal.
Press Y or Enter to accept the screen.
View Godown Summary
Go to Gateway of Tally -->Display --> Inventory Books --> Godown/Location --> Primary
Press Alt+F1 to view the report in detailed format.
Make an entry of the transaction in Payment Voucher in Single entry mode.
Select Cash in the Account field.
Select Service Charges and enter the amount as Rs. 31,250/-. Press Enter once to view Cost Allocation for the Service Charges screen.
Select New Systems Job from List of Cost Centres and press Enter once.
Select Travel Expenses and enter the amount as Rs. 20,000/- and press Enter once to view Cost Allocation for the Travel Expenses screen.
Select New Systems Job from List of Cost Centres.
Press Y or Enter to accept the screen.
4. On 8-4-2023, Rajesh delivered 15 new systems to SimplyC Solutions. The agreed price was Rs. 20,000/- per system.
Make an entry of the following transaction in Delivery Note
Go to Gateway of Tally -->Vouchers --> Alt + F8: Delivery Note
In the Party’s A/c Name select SimplyC Solutions from the List of Ledger Accounts.
Press Enter to view the Order Details screen and accept the default screen.
Select Computers from List of Items and press Enter once to view the Item Allocation screen for computers.
Select Tracking No: 1 and accept the Item Allocation screen. Ensure that the Item Allocation screen for computers is as shown:
Select Sales in the Sales Ledger field.
Press Y or Enter to Accept the Delivery Note.
5. On 8-4-2023, Computer Associates raises a sales invoice of Rs. 3,00,000/- at the rate of Rs. 20,000/- per system for 15 New systems delivered by Rajesh.
Make an entry of the transaction in a sales item invoice.
In the Party’s A/c Name select SimplyC Solutions from the List of Ledger Accounts.
In the Despatch Details screen, select Delivery Note No. 1 and accept the default details.
The Item, Quantity, Rate and Amount fields are updated automatically.
Accept the default Item Allocation screen.
In the Accounting details screen select Sales from List of Ledger Accounts.
In the Cost Allocation for Sales screen, select New Systems Job.
In the Bill-Wise Details screen, select the New Ref and enter the Name as SS-2. Enter the amount as Rs. 3,00000/-.
Press Y or Enter to accept the screen.
View Godown Summary
Go to Gateway of Tally -->Display --> Inventory Books --> Godown/Location --> Primary
Press Alt+F1 to view the report in detailed format.
Job Costing Reports
Job Work Analysis can be viewed for jobs resulting in deliverable products in the same way as for jobs resulting in deliverable services. Tally Prime provides following Job work related reports to analyses cost and revenue accumulated for any particular job at any given stage.
Job Work Analysis Report
Material Consumption Summary Display Job Work Analysis Report
Go to Gateway of Tally --> Display --> Statement of Inventory --> Job Work Analysis
Select the Upgrading Job to view the Job Work Analysis report for Upgrading Job.
The Job Work Analysis report of Upgrading Job appears as shown :
Material Consumption Summary
A Material consumption summary is a report that reflects the total material consumed from a godown alloted for a job. To arrive at the Material Consumption Summary:
Press Enter on Consumption The Material Consumption Summary is displayed as shown below:
To view Godown summary, press Enter on the required Godown
To view Job Work Analysis report of New Systems Job,
Go to Gateway of Tally --> Display --> Statement of Inventory --> Job Work Analysis
Select New Systems Job
The Job Work Analysis report of New Systems Job appears as shown :
Comparative Job Work Analysis
Computer Associates would like to compare the total jobs executed by them for SimplyC Solu- tions.
Go to Gateway of Tally --> Display --> Statement of Inventory --> Job Work Analysis --> New Systems Job -->
Select New Column from the Buttons bar or press Alt+C and select the Upgrading Job.
Select any number of jobs as required.
0 Comments