Question

What is the purpose and usefulness of job-order costing?

Answer in 4-6 sentences

Answer 1

Answer

The job order costing system is widely used to accumulate the costs associated with a specific batch of products. This system is most commonly used for small batch sizes, and especially when the products within each batch are different from the products created in other batches.

Usefulness:-

1. With the use of Job order costing companies can appraise the jobs that they are about to take up.4

2. Over a period of time, a job order costing system becomes a valuable database

3. Companies can use the job order costing system to find the jobs that they are competitive at and the ones that they are not