Ac505 Quiz 1 Essay

Traditional costing methods is the process of determining a unit cost by lumping indirect costs of manufacturing together and then parceling out by volume, number of units, machine hours or direct labor hours. Indirect costs

Process order cost systems are based on multiple work in process accounts and determine total manufacturing costs at the end of a time period. Multiple outsourced

“Companies can choose to use the accounting job order costing method when they have a single product line or numerous products to manufacture. However, it is less costly and less time-consuming if they elect to use process costing when calculating the manufacturing of a single product line. With similarities

17. What is the cost of ending work-in- process inventory using a weighted average process costing system?

The Samuelson Company uses a job-order cost system. The following data were recorded for June:

EEC should use a job order costing system. First off, I will start by describing what is job-order costing and process costing. Job order costing or job costing is a framework for appointing assembling expenses to a singular item or clusters of items. By and large, the job order costing framework is utilized just when the items produced are sufficiently not the same as one another. The point when items are indistinguishable or almost indistinguishable, the process costing framework will probably be utilized. Since there is a critical variety in the items fabricated, the job order costing framework will make work expense record for everything, occupation or unique request. The occupation expense record will report the immediate materials and immediate work really utilized in addition to the assembling overhead appointed to each one employment Process costing is a term utilized within cost accounting to portray one technique for gathering and doling out assembling expenses to the units generated. Preparing expense is utilized when almost indistinguishable

The number of services produced is low The number of services produced is high 12. Morrison, Inc., which uses a process cost accounting system, passes completed production from Department A to Department B for further manufacturing. The journal entry to record completed production in Department A requires: A Debit to Work-in-Process Inventory and Credit to Finished-Goods Inventory. B Debit to Work-in-Process Inventory Department A and Credit to Work-inProcess Inventory Department B C Debit to Finished-Goods Inventory and Credit to Work-in-Process Inventory Department A D Debit to Work-in-Process Inventory Department B and Credit to Work-inProcess

The objective was to move from the concept of job cost system that the company mimicked. The notion of job order is a disadvantage to Super Bakery. The order cost of its customers was at a fixed cost. The problem exist as the orders with high margins subsidized low margins. Profit margins are not recognized by the cash flow produced by order. A process cost system could be used by the company but will impose disadvantages. Process costing advantages include the ability for companies to create a cost for products where it is difficult to track cost flows for each

Process costing typically used by companies that produce large quantities of identical products that are made in long, continuous production runs through a series of process centers (departments). Process costing accumulates costs in a department for an accounting period and then spreads them evenly, or on an average basis, over all units produced that month.

The report provides the benefits of the absorption and variable costing to reveal how the two costing methods enhance managerial decision.

In response to Brittany Hill’s thread on Job & Process Costing Systems, I can easily say that she was very articulate in her passage. The thread is well detailed and presented in a manner that is not confusing to the reader. To begin with, it is important that she starts out by highlighting the differences between the two. For most people, costing systems can mean almost the same but as described by Cohen & Kaimenaki (2011), different situations will allow specific systems to be utilized. This is exactly what Hill has been able to communicate.

The ABC method is a good fit for Super Bakery. The job order cost system works for SB because it assigns cost to each account identifying services or products that are profitable. Therefore, access to the company’s profits for each individual job and the profitability of the outsourced activities allows managers to make educated decisions about the company’s financial needs. By using financial reports managers

We will examine the given data from the case and compare the unit costs from the company’s current costing system (traditional costing) and from activity-based costing. We will also highlight other qualitative data in consideration with the numerical factors that may result to a significant change on our recommendation.

While all three costing method would work for a newly existing company in various areas, the actual costing method would be best for the first few years. The reason for this rationale, is that the company is new to the business environment and it would take some time for managers to acclimate their operations and production levels. As time passes, managers will have to change their strategy to the normal costing to avoid losing consumers to its competitors. Firms’ have to be able to reduce costs for their products and services, without losing the quality of the products (Apak, 2012).

Many companies, particularly those in the manufacturing industry mostly produce products following a forecasting on demand. Though from time to time it can make them on receiving orders from its clients. The items that are made and the work which is completed in accordance with the order of a customers is called job. Hence, the costing process intended to establish the cost of a job is extremely important. Job order costing therefore is the costing system which establishes the cost of the jobs obtained from a client (Walther, n.d.). In this way, job order costing approximations the costs of producing products in line with clients' instructions.