Question

Why do you think the accounting requirements for job-order costing are more demanding than those for process costing

Answer 1

Since there is a cost involved in allocating the specific material and labor to the product, job order cost systems are sometimes more expensive to operate than a straightforward process costing system.

What is job order costing?

Job order costing is a costing approach used to calculate the cost of producing each product. This pricing approach is typically used when a company creates a number of items that are distinct from one another and wants to assess the cost of performing a single operation. Direct labor, direct supplies, and manufacturing overhead are all included in task pricing.

Job order costing can be used to determine if a job is profitable.  Efficient task order costing enables businesses to generate bids that are competitive while being profitable.

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