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.

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.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter1: Introduction To Managerial Accounting

Section: Chapter Questions

Problem 6E

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Similar questions

Walsh & Coggins, a professional accounting firm, collects cost information about the services they provide to their clients. Describe the types of cost data they would collect and explain the importance of analyzing this cost data.
Give some examples of service firms that might use job-order costing, and explain why it is used in those firms.
You mention changes and revisions to the standard cost systems. If you were the Operations manager of a manufacturing firm, what control would you have in place to assure those changes were proper and accurate? What assertions would apply here?
Activity-based-costing (ABC) can: Group of answer choices make managers realize that only products determine company profitability. only be used in a process costing system and not in a job order costing system. be used to determine the cost of direct materials and direct labor. be used with either a job order or a process costing system.
Job costing is defined by cost accumulation and cost measurement that support the strategic role of costing and cost flows. Managing costs is a main duty of a cost accountant. Discuss how the concepts of cost accumulation and cost measurement apply to direct, indirect, and manufacturing overhead costs when using job costing. Include an example of your thinking.
Please create a study/cheat sheet on these concepts in managerial accounting: 1. Managerial Accounting Concepts and Cost Flows 2. Cost Accounting Systems: Job Order Costing 3. Cost Accounting Systems: Process Costing 4. Activity-Based Costing Just include formulas and include when to use them (what types of problems). Also any rules.
Which of the following statements is not always true? Question 3 options: The job - order costing system is used by manufacturing companies. All costs used in job - ordering costing are actual costs. The job - order cost sheet is subsidiary to the work - in - process account. The job - order costing system is simpler to use than process costing because the record keeping requirements are less.
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.
You have been asked to install a costing system in a manufacturing company. What practical difficulties will you expect and how will you propose to overcome the same? In view of the difficulties and suggestion to overcome them what main considerations will you keep in mind to introduce the system?
From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences:a. The phase of the management process that uses process information to eliminate the source of problems in a process so that the process delivers the correct product in the correct quantities is called (directing, improving).b. Direct labor costs combined with factory overhead costs are called (prime, conversion) costs.c. The salaries of salespeople are normally considered a (period, product) cost.d. The plant manager’s salary would be considered (direct, indirect) to the product.e. Long-term plans are called (strategic, operational) plans.f. Materials for use in production are called (supplies, materials inventory).g. An example of factory overhead is (electricity used to run assembly line, CEO salary).
Which of the following statements concerning general ledger accounts is true? The general ledger accounts are the only source of accounting information that managers of job order cost operations need to plan and control production activities. The general ledger accounts sometimes have many errors so managers of job order cost operations need to look to other information to plan and control production activities. The general ledger accounts do not provide the accounting information that managers of job order cost operations need to plan and control production activities. The general ledger accounts do not provide the accounting information that managers of job order cost operations need because of deficiencies in internal controls.
a. Describe the flow of costs through a product costing system. What specific accounts are involved and how are they used? b. When a single volume based cost driver is used to apply manufacturing overhead, what is the managerial accountant's primary objective in selecting the cost driver? c. Assume Kardan university has decided to replace all professors with teaching robots. How might this switch impact on the university's choice of cost driver as the basis for overhead application? Explain.