?1. Compare and contrast each of these costing structures and provide examples from industry or companies as to how each costing system may be used.
2. What are the similarities and differences that companies use these systems to monitor?
Work will be a minimum of 300-400 words or 3 paragraphs and should include insights and concepts. While you may be asked to provide an opinion, the evidence must support your position. At least 2 references (textbook and another independent source). Also, cite your sources (APA 7.0 ed).
GUIDANCE FOR THIS WORK;
This week we studied two main costing methods: job-order costing and process costing. Companies can use either method depending on what they are manufacturing for sale. You might also have companies that utilize both where they manufacture both custom/unique items and standard products. For example, Nike makes sports/activewear for the average consumer as well as special-order/unique items for specific colleges/professional teams.
It is important to understand the differences between these cost systems as they are geared towards what the company is making. For example, Lays, Inc. uses mainly a process costing system in the making of potato chips. Batches are created for different flavors or types of chips manufactured. While each batch may be different flavors, the process overall is homogenous in contrast to job-order costing. Job-order costing is focused more on unique or one-of-a-kind products. Swimming pool construction is a job-order costing process. Even though the basic process of digging a hole, lining it with rebar, plastering, and finishing is approximately the same, there are unique features to consider. Size, shape, the color of plaster, color of decorative tile/stone create that uniqueness that must be tracked for each job.