630 wk2 db2 res | Business & Finance homework help

Respond to…  

Don't use plagiarized sources. Get Your Custom Essay on
630 wk2 db2 res | Business & Finance homework help
Just from $13/Page
Order Essay

Explain the similarities and differences between job order costing and process costing. 

In your explanation, provide examples of when job order costing and process costing would be most appropriate.

There are various similarities and differences between the costing methods; job order costing and process costing and each concept plays a very specific role in a company’s allocation of costs.  The most distinguishable is the differences of the two systems.  For instance, job order costing focuses on a separate tracking of expenses that is expressly designated to one job or order (Schneider, 2017).  Compared to the process costing method where the cost is assigned to a particular department.  Another notable difference is that the process cost system assigns costs for a particular time period, whereas the job order system does not as it can be for any determined timeframe at any point. 

While there are several differences both methods also share distinct similarities.  For example, each concept has the same overall goal of defining the actual costs of product(s).  Additionally, while the cost flows can also be noted as a difference the components of the cost flow are going to be the same as they both entail, inventory, labor, overhead, etc. 

Dependent on what the company produces is going to determine the preferred method of costing.  The job order costing method is going to be best suited for a business that produces custom made products or products that are produced for a particular customer and where each order is going to vary because of customer’s preferences. 

An example would be a cabinet company where each order is going to be different and specific to the customers needs and wants therefore costs are going to vary.  However, a company that produces a mass amount of the same product for a continuous or long-term basis is going to prefer the process costing system.  A paper or gas company are usually going to prefer this method of costing.    

References:

Schneider, A. (2017). Managerial Accounting: Decision making for the service and manufacturing sectors(2nded.) [Electronic version]. Retrieved from https://content.ashford.edu/

Respond to…

Job order is a cost summary for each job and a job cost system tracks each cost separately for each job or product (Schneider, 2017). This is different then process costing which separates costs by each department then combines all costs for a product or job from each department who worked on the product to determine a unit cost (Schneider, 2017). Job order cost system is typically used for smaller products or jobs. Managers can track the costs of a product or job to ensure a reasonable quote to the customer, (Bragg, 2018). In job costing the amount of labor and materials is different between the products, such as building construction (Schneider, 2017). When constructing a building there are different materials used throughout the process, and will be different for each building built, therefore the materials and labor will change depending on the floor plan. A process costing system is usually used for larger production or jobs. This is done when the job has the same materials, and cost for production. An example for process costing is manufacturing oil. You cannot determine the exact amount of producing 1 gallon of oil because it is produced in a larger batch. However, the combined cost can be divided by the amount produced to determine a unit price (Bragg, 2018).

Bragg, S. (2018). Job order costing system. Accounting Tools. Retrieved from https://www.accountingtools.com/articles/job-order-costing-system.html

Schneider, A. (2017). Managerial Accounting: Decision making for the service and manufacturing sectors (2nd ed.) [Electronic version]. Retrieved from https://content.ashford.edu/

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 15% with the discount code ALLTIME