Final answer:
Job cost sheets are used to track and allocate costs associated with a specific job or project. They record direct materials, direct labor, and overhead costs incurred for a particular job. By analyzing job cost sheets, companies can determine profitability, identify cost overruns, and make informed decisions.
Step-by-step explanation:
The purpose of using job cost sheets in companies is to track and allocate the costs associated with a specific job or project. Job cost sheets are used to record direct materials, direct labor, and overhead costs that are incurred for a particular job.
For example, in a construction company, a job cost sheet would track the cost of materials such as cement, steel, and lumber, the hours of labor spent by workers, and the overhead expenses like equipment rentals and permits.
By analyzing job cost sheets, companies can determine the profitability of each job, identify areas of cost overruns, and make informed decisions regarding pricing, resource allocation, and process improvements.