Advantages of a Digital Depository System
In the previous article, we learned about what a digital depository system is and how it functions. We also understood the roles and responsibilities played by each participant in the system. In this article, we will continue to understand the depository system further. We will have a look at some of the functions which are […]
Cognitive Dissonance Bias
All investors have pre-existing beliefs about the way investment markets work. These beliefs are often deep-rooted and subconscious. For example, some investors believe that investing in index funds is better than investing in mutual funds. There are still other investors who believe that investing in precious metals or real estate is better than investing in […]
Macro-Economic Factors and their Effect on Personal Finance
Personal finance is defined in such a way that it is supposed to be linked with the financial decisions of an individual or their family. Any decision which is taken at a higher level is not considered to be a part of the personal-finance domain. However, it is important to realize that decisions related to […]
The Bias Blind Spot
We are now aware of the fact that investment markets are not driven by mathematical decisions alone. They are heavily influenced by the emotional quotient of investors. In fact, a large number of successful investors attribute their success to their ability to manage their emotions. This is done by understanding the different types of behavioral […]
What is Investment Banking?
The topic of investment banking is fascinating. This is because some of the biggest banks in the world i.e., Barclays, JP Morgan, Citi, Morgan Stanley, etc. all have investment banking divisions. In fact, they have had investment banking divisions for a very long time. The average age of these investment banks is often said to […]
The following is the list of the most probable causes that would cause the job order costing system of the company to fail:
In modern times, we have information technology to the rescue. Companies can now buy off the shelf products for job order costing and use them to simplify the creation of the elaborate system.
The bookkeeping staff needs to be trained about the specifics of job order costing. This training is often expensive and takes time. Only after the process has been somewhat established, does a job order costing system give the benefits that it has been touted to provide.
For instance the allocation base needs to be selected, predetermined overhead rates need to be created and such other tasks need to be done. These tasks require skill and judgment. Only a person that is thorough with the operations of the firm can do these tasks. Thus the firm must ensure that they have relevant expertise before they begin adopting the technique.
The causes of incorrect job order costing can be quite grave. They have been listed below:
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