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Job Order Costing

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Under what conditions would you choose a job-costing system and under what conditions would you choose a process-costing system? Give some examples of products that would be costed under each method.

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Solution Summary

This posting involves a question about production. Job order costing is examined in this solution. The explanation is given in 413 words.

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Problem: Under what conditions would you choose a job-costing system and under what conditions would you choose a process-costing system? Give some examples of products that would be costed under each method.

Answers:

In order to be successful and survive, businesses must employ some type of product costing system. In other words, companies need to track the cost of making a product or furnishing a service. Usually two major types of costing systems are used in manufacturing and many service companies: process costing and job-order costing.

Job Order Costing system:

Job Order Costing is used by companies where products or services are identifiable by individual ...

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