Question

a) Explain, in detail what Job Order Costing System of cost accumulation. What kind of businesses could possibly benefit from this costing system? How are the manufacturing and non-manufacturing costs allocated under this system? b) There are various techniques of materials control. Just-In-Time Inventory System is one of them. Discuss how this technique was developed, its features, and the benefits it offers. How a business can prepare itself to adopt this technique. c) Every organization is highly concerned in understanding the efficiency of its employees. Various methods have been developed to address this need. Discuss any four methods of rating employees’ efficiency.

Answer 1

A) Job Order Costing is a system for assigning and accumulating manufacturing costs of an individual unit of output. The job order costing system is used when the various items are significantly different from each other and each has a different cost.

The industry that could benefit from the job order costing are clothing, aviation, food industry, law firms,hospitals etc.

The allocation of manufacturing and non manufacturing costs under this method is based on the type of usage of each costs.

C) The four methods to rate employees Effeciency are

1. Quantitative Evaluation

It is based upon statistics and uses various standards to track productivity.In this the standards are set and employees performance is measured against them.It should be noted that standards should be realistic and clearly communicated being free of any ambiguity.

2. 360 Degree Feedback

Under this method an employee is rated by his subordinates, peers, coordinates, clients and even by customers.An employee is measured by all sides thus being called a 360 degree feedback.

3. Competency on a Scale

Under this method the performance of an employee is measured by a grade of scale in various areas of his duties.Various criteria like team work, accountability, team work, quality of work, client satisfaction, safety concern are used to evaluate the employee and then rate them on those basis.

4. Self Evaluation

It is one of the vital methods unlike other method an employee is given a direct chance for growth and given a voice to increase his performance.In this method the performance is being clearly monitored due to the direct access between the employee and it's subordinates.

B) Just in Time is primarily a technology aimed at reducing times with the production system as well as the response from suppliers nad to customers.

Just in Time is a Japanese technology being first used in Japan in 1970s and the Toyota in Japan being the first one to use it.

Features and Benefits of Just in Time

Reduce all around inventory costs.

Low warehousing costs.

Less reliance on forecasting.

Less spoilage and usage.

Higher Return on Total Assets Ratio.

To be used an overall in-depth analysis of the concerned industry is to be done to find the resources available, the success rate in implementation and other factors.