In a service business that uses a job order costing system, the professional staff would normally keep precise records of time spent on each client. It is equally important that the clerical staff and other indirect labor personnel keep similar records of time spent on each client.

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In a job order costing system, indirect labor (such as clerical staff) costs are usually allocated based on a predetermined overhead rate, rather than tracking the exact time they spend on each client, which is more common for direct labor like professional staff.

In a Service Business That Uses a Job Order Costing