Answer:
Step-by-step explanation:
One of the benefits of job order costing is that it allows managers to calculate the benefits they receive from individual jobs and helps them to determine whether specific jobs are desirable in the future. This is best for businesses that do extremely specific jobs, such as construction contractors and consultants.
Job orders costing also gives managers the advantage of tracking individual and team performance in terms of cost control, efficiency and effectiveness.
One disadvantage of job order costing is that employees control all the materials and work used during the job. As an example, consider a construction contractor using a business order cost system. The Contractor shall inform all work, timber, nails, screws, electrical installations, paint and other materials, as well as lunch breaks and hours of work of the employees.
The use of job order costs in a production environment involves which "work" uses different types of direct costs such as direct labor and direct material, and then allocates overhead (indirect labor, warranty, quality control, and other overhead). An enterprise income statement is similar to a statement of profit or loss for the firm, but is specific to each business number.