Limitations of Job Order Costing

  1. Job costing involves comparison of profitable and non-profitable opportunities. This cost comparison can become worthless for many industries when there are major changes in the economic
  2. It is a very expensive option.
  3. Additional clerical work is required for collecting money from an individual
  4. The effectiveness of a job costing system highly relies on the operation of a steady production control system.
  5. Nature wise job costing system is based on the costing of the past. Due to this nature, it is meaningless to be used for controlling and planning for future purposes in

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