Question 1 - are indistinguishable from one another. Under...

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Question #1 In choosing a product costing system, what are the two choices available for a cost accumulation system? How do these systems differ? Hi Professor and class, The two choices for cost accumulation are the job order and process costing systems. A company should use job order costing when it is necessary and possible to trace costs to products made for individual customers. Job Order Costing is used by manufacturers who make special orders, customized products, or standard products produced in batches. Process Costing is used by manufacturers who mass produce large quantities of identical units in a continuous flow. The differences between job order costing and process costing come from two factors, the first is that the  flow of units in a process costing system is more or less continuous, and the second is that these units 
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Unformatted text preview: are indistinguishable from one another. Under process costing it makes no sense to try to identify materials, labor, and overhead costs with a particular order from a customer; as done with job order costing, since each order is just one of many that are filled from a continuous flow of virtually identical units from the production line. Under process costing, a company accumulates costs by department rather than by order, assign these costs uniformly to all units that pass through the department during a period. Jack Cost Accounting. Foundation and Evolutions. Michael R. Kinney and Cecily A. Raiborn...
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This note was uploaded on 07/16/2011 for the course COST ACCOU 410 taught by Professor David during the Fall '10 term at Kaplan University.

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