Question

Define job costing and its characterstics?

Answer 1

advantages are

1. The costs may be ascertained at any stage of completion of a job. This gives scope for control of costs by taking suitable steps.

2. The profit earned from each job is known separately in Job costing.

3. On completion of a job, each element of cost, selling price and profit can be compared with the estimates for the purpose of cost control and reduction so that the profit on each job is maximized in job costing.

4. Management can estimate the cost of job on the basis of past records in job costing.

5. The actual costs of previous job can be compared with present job executed.

6. The overhead recovery rates may be predetermined on the basis of budgets.



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