Question

why do companies use job-order costing to assign manufacturing costs to individual jobs ?

Answer 1

Ans. Job order costing system is generally used by companies that manufacture a numder of different-2 products . Manufacturing companies using job order costing system usually receive orders for customized products.

When companies accept orders or job for different products , the assignment of cost to products becomes a difficult task. in these circumstances, the cost record for each individual job is kept because each job have a different product and therefore different cost associated with it.

with that assigning of manufacturing cost to individual job it easy to understand total cost and per unit cost of different -different job.