Costs stay in the work-in-process account throughout the job. When the job is finally completed, they are transferred to the finished goods account. By using this method, accountants can make sense of complicated jobs that are moving towards the process of completion.
The following are a limitation of job costing
- It is said that it is too time-consuming and requires detailed record keeping. This makes the method more expensive.
- Record keeping for different jobs may prove complicated.
- Inefficiencies of the organization may be charged to a job, though it may not be responsible for the same. In spite of the above limitations, it can be said that job costing is an extremely useful method for computation of the cost of a job. The limitation of time-consuming can be removed by computerization and this can also reduce the complexity of the record-keeping.