I covered the topics of job order vs. process costing. These are two widely used methods to calculate product costs. Each method has its strengths and weaknesses, and the allocation of overhead costs adds another layer of complexity to the equation. Describe the fundamental differences between job costing and process costing. How do they apply to different types of industries or businesses? Provide real-life (or hypothetical) examples of industries or companies that predominantly use job costing or process costing. What do you think are the reasons behind their choice?

Companies can choose from different costing methods: process/product costing and activity-based costing. Think about a company, what are the differences between the two costing methods, and how do these apply to your company?

What is the best reponse to this post? ob costing is a way for businesses to manage the costs and profitability of a specific job or project. This type of cost accounting is most beneficial to companies that make custom/unique products. An industry that may choose job costing is a construction company. They may specialize in a particular service, such as installing water pipes underground, but each project will vary in size, length, location, etc. They would use this method because each project would vary widely, so you could not spread the costs evenly for each one. Process costing is a way of evenly spreading costs for their products because all products are either mass-produced or very similar. An example of a company that would use process costing is a paper company. They produce one product in large quantities to allocate the costs evenly for each batch produced. The main difference between the two is how the overhead is assigned to the product, where job costing is more for…

What is a good response to? Activity-based costing (ABC) has transformed how organizations measure and manage costs by breaking overhead costs into cost pools based on activity (Kenton, 2024). ABC allocates overhead costs based on a particular activity instead of spreading it out evenly. This gives management clear information to determine which activities benefit the company and which may need to be altered or discontinued. An example of a company using ABC could be electrical costs. If the electrical costs fluctuate based on labor hours, management could use the labor hours as a cost driver. They could determine the cost driver rate by dividing the electric costs for the year by the annual labor hours. Once they determine the cost rate, they can multiply that by the electrical hours used for an activity to calculate the cost. In the example given, it would be pretty easy to implement; however, there are several overhead costs to calculate, which would require a lot of record-keeping,…

Overhead application to costs is a critical issue for the costing of your products. We are studying several ways to handle this situation. What would cause an overhead to be overapplied, or underapplied. Discuss the results to your decision making and the financial statements for each of those two situations.

Which one of the following is not correct about job-order costing systems and process costing systems? O a Job order costing systems and process costing systems use similar manufacturing accounts. O b. None of the given answers Oc In process costing systems cost accumulation is done on a department basis. Od. Job order costing systems and process costing systems have different flow of costs through manufacturing accounts, O e. Job order costing systems normally used when there are varieties of products to produced. Which one of the following is not correct regarding the predetermined overhead rate? O a The predetermined overhead rate is normally calculated at the beginning of the period. Ob. The predetermined overhead rate is used to assign manufacturing overhead costs to cost objects such as products. OC None of the given answers. O d. The predetermined overhead rate uses actual figures for the manufacturing overhead cost but estimated figures for the cost allocation basis amount. O…

What are the major differences between job-order costing and process costing systems? Give an example of a well-known company that might use job costing, and an example of a well-known company that might use process costing. Explain why you have chosen the companies that you did, and do not choose companies upon which your classmates have already commented. Participate in follow-up discussion by commenting on your classmates’ choices of companies.