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Objectives of Job costing

87

2.5 Objectives
1) To calculate the cost and profit/loss in terms of every job or order and enable
the management to take appropriate decisions based on the judgement of each
job’s profitability.
2) To value the work-in-progress of each job.
3) To estimate the costs of jobs in advance of their execution and quote selling
prices for the same. This is done based on the past records.
4) To compare the estimated costs with the actual costs of the jobs and take
remedial actions.
5) To control the costs based on the estimated amounts.


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