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22 Jan 2019

Job order costing is one method of accounting for the costs ofcertain types of manufacturing and service jobs. What type ofmanufacturing and/or service companies would most likely use joborder costing? What type of companies would not use job ordercosting? Explain a situation where a company might use job ordercosting for one product, and another costing method for otherproducts

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Elin Hessel
Elin HesselLv2
23 Jan 2019

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Make a comment relating to posts and reply to one where you canadd additional discussion to the topic.

The topic: (In Chapters 1 to 3 you were introduced to ManagerialAccounting Concepts and how they can be applied in job ordercosting or process costing. In chapter 4 you focus on alternativemethods of assigning the overhead costs regardless of whether it isjob order costing or process costing. You are to think of abusiness that you know either as an employee or consumer. Shouldthey use process costing or job order costing and which method ofoverhead allocation would best serve this business. )

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Last year I worked at David's Bridal in NYC. David's Bridalshould use process costing because the nature of the business issuch that each dress is ordered from the store and then customized(altered) afterwards. For example, 3 women who order the same dressin a size 6 will receive the same exact dress, and then afterwardsthey can go to the alterations department to do things like makethe dress shorter or sew on a belt. Because they initially receivethe same exact dress as one another, process costing is mosteffective. For overhead allocation, David's Bridal should use thedepartmental overhead rate method. This would work better than aplantwide method because, for example, wedding dresses take morelabor hours and more materials to make than bridesmaids dresses, sothey should have different overhead rates applied to oneanother.

Can I get an answered not previously used?

1. Why do most companies use normal or standard costing? After all, actual costing gives the actual cost, so the firm could just wait until it knows what the cost will be.

2. The management of a liquid cleaning product company is trying to decide whether to install a job or process costing system. The manufacturing vice president has stated that job costing gives the best control because it is possible to assign costs to specific lots of goods. The controller, however, has stated that job costing requires too much record keeping. Would a process costing system meet the manufacturing vice president’s control objectives? Explain.

Identify each statement as true or false. If false, indicate howto correct the statement.

1. Process cost systems are used to apply costs to similarproducts that are mass-produced in a continuous fashion.
2. A process cost system is used when each finished unit isindistinguishable from another.
3. Companies that produce soft drinks, motion pictures, andcomputers chips would all use process cost accounting.
4. In a process cost system, costs are tracked by individualjobs.
5. Job order costing and process costing track differentmanufacturing costs elements.
6. Both job order costing and process costing account for directmaterials, direct labor, and manufacturing overhead.
7. Costs flow through the accounts in the same basic way for bothjob order costing and process costing.
8. In a process cost system, only one work in process account isused.
9. In a process cost system, costs are summarized in a job costsheet.
10. In a process cost system, the unit cost is total manufacturingcosts for the period divided by the units produced during theperiod.

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