Under a job order cost system, the company assigns costs to each job or to each batch of goods. An example of a job is the manufacture of a mainframe computer by IBM, the production of a movie by Disney, or the making of a fire truck by Western States. An example of a batch is the printing of 225 wedding invitations by a local print shop, or the printing of a weekly issue of Fortune magazine by hi-tech printer such as Quad Graphics.
An important feature of job order costing is that each job (or batch) has its own distinguishing characteristics. A job order cost system measures costs for each completed job, rather than for set time periods.