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Unformatted text preview: ACC520, Week 2, Ex 2-1 Akil Campbell March 18, 2011 Question 1 What characteristics of the product or manufacturing process would lead a company to use a process costing system? Give two examples of companies that are likely to use process costing. What characteristics of the product or manufacturing process would lead a company to use a job costing system? Give two examples of companies that are likely to use a job costing system. (10 points) Answer 1 Process costing is a system for assigning costs to a large number of identical units that typically pass through a series of uniform production steps. Related costs are averaged over the units produced so that each unit bears the same unit cost. Products are manufactured in large quantities but sold in small quantities or individual units (Braun, Harrison, & Tietz, 2010). Two examples of companies that would use process costing are Dunkin Donuts (glazed donuts) and General Motors which applies this method for the production of standard model cars such as Saturn and...
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- Spring '11
- Managerial Accounting