W4chp3-class materials - Chapter Three Systems Design:...

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Unformatted text preview: Chapter Three Systems Design: Job-Order Costing Learning Objective 1 Distinguish between Distinguish between process costing and job process costing and job-- order costing and identify order costing and identify companies that would use companies that would use each costing method. each costing method. Types of Product Costing Systems Process Costing Job-order Costing  A company produces many units of a single product.  One unit of product is indistinguishable from other units of product.  The identical nature of each unit of product enables assigning the same average cost per unit.  A company produces many units of a single A company produces many units of a single product. product.  One unit of product is indistinguishable from One unit of product is indistinguishable from other units of product. other units of product.  The identical nature of each unit of product The identical nature of each unit of product enables enables assigning the same average cost per unit. assigning the same average cost per unit. Types of Product Costing Systems Process Costing Job-order Costing  A company produces many units of a single product.  One unit of product is indistinguishable from other units of product.  The identical nature of each unit of product enables assigning the same average cost per unit.  A company produces many units of a single A company produces many units of a single product. product.  One unit of product is indistinguishable from One unit of product is indistinguishable from other units of product. other units of product.  The identical nature of each unit of product The identical nature of each unit of product enables enables assigning the same average cost per unit. assigning the same average cost per unit. Example companies: 1. Weyerhaeuser (paper manufacturing) 2. Reynolds Aluminum (refining aluminum ingots) 3. Coca-Cola (mixing and bottling beverages) Example companies: Example companies: 1. Weyerhaeuser (paper manufacturing) 1. Weyerhaeuser (paper manufacturing) 2. Reynolds Aluminum (refining aluminum ingots) 2. Reynolds Aluminum (refining aluminum ingots) 3. Coca 3. Coca-- Cola (mixing and bottling beverages) Cola (mixing and bottling beverages) Types of Product Costing Systems Process Costing Job-order Costing  Many different products are produced each period.  Products are manufactured to order.  The unique nature of each order requires tracing or allocating costs to each job, and maintaining cost records for each job.  Many different products are produced each period. Many different products are produced each period.  Products are manufactured to order. Products are manufactured to order....
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This note was uploaded on 04/18/2011 for the course FINANCE 1001 taught by Professor Lochengshu during the Spring '11 term at National Cheng Kung University.

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W4chp3-class materials - Chapter Three Systems Design:...

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