Does Job Costing suffer from any specific disadvantages?
As with its advantages, one disadvantage becomes readily apparent after reviewing job costing as an accounting approach. Potentially, at least, job costing offers readily available cost information and flexibility to businesses, but such information and flexibility are highly dependent upon the accuracy of your cost reporting system. The increased flexibility is driven by the constant input and integration of diverse information; information concerning employee labor, inventory movement and general overhead costs. Your job costing system must thus not only provide for constant cost data inputs, but must also allow you or your employees to easily organize and access that information. As a result, the creation of such an accurate job costing system may prove cost prohibitive for certain businesses. Some other potential disadvantages include: • Ignorance of other costs: An exclusive focus on job-related costs may cause your business to ignore or overlook other costs within your business,