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  Advantages of Job Costing

Advantages of Job Costing

The following are the advantages of job costing.

Ø   Correct information is available concerning to the cost of the job completed and the profits generated from the same.

Ø   Proper records are kept regarding the material, labor and overheads that is why a costing system is built up

Ø   Helpful cost data is produced from the point of view of management for appropriate control and analysis.

Ø   Performance analysis along with other jobs is feasible through comparing the data of several jobs. Though it should be keep in mind that each job completed might be dissimilar from the other.

Ø   If standard costing system is in effect, the actual cost of job can be compared with the standard to observe any deviation among the two.

A number of jobs are priced on the basis of cost plus basis. In such types of cases, a profit margin is included in the cost of the job. In such circumstances, a customer will be ready to pay the price if the cost data is reliable. Job costing assists in maintaining this reliability and the data made available becomes credible.

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