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Advantages of Job Order Costing

(i)                 It enables the organisation to find which jobs are more profitable and those which are unprofitable.
(ii)               It helps the management to determine the operating efficiency of the various factors of production and some of the functional    units.
(iii)             It helps in determining the cost of similar jobs taken up in future and thus helps in formulation of future production planning .
(iv)             Accurate identification of wastage, spoilage and defectives with respect to the production orders may assist the management to take effective steps in reducing these to minimum extent.
(v)              By employing predetermined overhead rates in job costing, all the advantages of budgetary control can be obtained.