Question

compare and contrast the various costing systems you learned about in this course as part of your defense. ACC 202 SNHU needed for a power point slide

Answer 1

Answer:-

The followings are top six types of costing systems. The types are: 1. Historical Costing 2. Absorption Costing 3. Direct Costing 4. Marginal Costing 5. Standard Costing 6. Uniform Costing.

However there are other various costing system exists.

Job Costing

Job costing involves a series of transactions that accumulate the cost of materials, labor, and overhead (of which there are two different calculations) to a specific job.

This is a commonly used system that is primarily targeted at production situations where customized goods are produced for specific customers.

Process Costing

This is also a heavily used system, and is most common in situations in which large quantities of exactly the same product are created.

Process costing is used in those situations in which it is impossible to clearly differentiate the cost of individual units of production. For example, it is a prime candidate for use in an oil refinery, where it is impossible to track the cost of an individual gallon of diesel fuel.

Standard Costing

This methodology has been installed in many companies as an adjunct to both the job costing and process costing systems. The first step in the creation of a standard costing system is to create a set of standard costs in a variety of different areas.

The industrial engineering staff is assigned the task of creating direct labor standard costs, while the purchasing staff is most typically assigned the chore of creating standard costs for purchased goods, and the cost accountant is called upon to coordinate the development of a set of standard overhead costs.

Direct Costing

A direct cost is a cost that is directly associated with changes in production volume.

This usually restricts the definition of direct costs to direct materials and direct labor (and a strong case can be made for not using direct labor, since this cost tends to be present even when production volumes vary).

For example, the materials used to create a product are a direct cost, whereas the machine used to convert the materials into a finished product is not a direct cost, because it is still going to be sitting on the factory floor, irrespective of any changes in production volume.

Throughput Accounting

A variation on direct costing is throughput costing. A costing methodology that focuses on capacity utilization is called throughput accounting.

It assumes that there is always one bottleneck operation in a production process that governs the speed with which products or services can be completed. This operation becomes the defining issue in determining what products should be manufactured first, since this in turn results in differing levels of profitability.

This methodology holds that the only direct cost is direct materials, with even direct labor costs being thrown out when making most cost-related management decisions.

Activity-based Costing (ABC)

An ABC system is designed to match overhead costs as closely as possible with company activities. By doing so, overhead costs can be reasonably associated with products, departments, customers, or other users of activities, which tells managers where overhead costs are being used within a company. This results in much better control over overhead costs.

Target Costing

Most of the costing methodologies described in this post are primarily concerned with the interpretation of costing data after it has already been incurred. Target costing differs from them in that it describes the costs that are expected to be incurred, and how this will impact product profitability levels.

By-product and Joint Product Costing

There are a few situations in which multiple salable products are created as part of a production process, and for which there are no demonstrably clear-cut costs beyond those incurred for the main production process. When this happens, the cost accountant must determine a reasonable method for allocating these costs.