What is a job order cost system? Describe a situation in which you would use job...

What is a job order cost system? Describe a situation in which you would use job order cost information. What type of information is useful in making your decision?

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Job order costing system is generally used by companies that manufacture a number of different products. It is a widely used costing system in manufacturing as well as service industries.Job order costing or job costing is a system for assigning and accumulating manufacturing costs of an individual unit of output. The job order costing system is used when the various items produced are sufficiently different from each other and each has a significant cost.

Since there is a significant variation in the items manufactured, the job order costing system requires a separate job cost record for each item (or each job or special order). The job cost record will report each item's direct materials and direct labor that were actually used and an assigned amount of manufacturing overhead.

The job cost records also serve as the subsidiary ledger or documentation for the manufacturer's cost of the work-in-process inventory, the finished goods inventory, and the cost of goods sold.

When companies accept orders or jobs for different products, the assignment of cost to products becomes a difficult task. In these circumstances, the cost record for each individual job is kept because each job have a different product and, therefore, different cost associated with it

ekkarill92 answered 1 year ago

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