Question

What do you think is the main advantage of job order costing? Then how would the company use job-order cost to assist them in determining the proper selling price for their product or service?

Answer 1

Job Order Costing

Job Order Costing is a framework for allotting and aggregating fabricating Costs of an individual unit of yield.

One favorable position of Job Order Costing is that it permits administrators to compute the benefit earned on singular Jobs, helping them to all the more likely discover whether explicit Jobs are alluring to seek after later on. This is best for organizations that do exceptionally custom work, for example, development contractual workers and experts.

Job Order Costing likewise gives supervisors the benefit of having the option to monitor people's and groups' working as far as Cost-control, effectiveness and profitability.

The Job Order Costing framework is utilized when the different things created are adequately not quite the same as one another and have a critical Cost.

Therefore, Selling Price can be easily determined by adding Cost and contract.

Since there is a huge variety in the things produced, the Job Order Costing framework requires a different Job Cost record for or each Job. The Job Cost record will report every thing's immediate materials and direct work that were really utilized and an appointed measure of assembling overhead.