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In: Accounting

Define a job order cost system and provide 3 examples of products that would use this...

Define a job order cost system and provide 3 examples of products that would use this system:

Define:____________________________________________________________________________________________________________________________________________________________________

Examples:

1.________________________________________________________

2.________________________________________________________

3.________________________________________________________

Define a process cost system and provide 3 examples of products that would use this system:

Define:____________________________________________________________________________________________________________________________________________________________________

Examples:

1.________________________________________________________

2.________________________________________________________

3.________________________________________________________

Solutions

Expert Solution

Answer:- Job order cost system:- It is a cost accounting system in which direct costs are traced and indirect costs are allocated to unique and distinct jobs instead of departments. This costing system is used when products are made based on specific customer orders. Each product produced is considered a job. It is appropriate for entities that provide non-uniform customized products and services.

Examples:-1)-Accounting, consulting and legal firms

2)-Architects/Interior designer

3)-Book publishers

Process costing system:- This costing system accumulates costs when a large number of identical units are being produced. In this situation, it is most efficient to accumulate costs at an aggregate level for a large batch of products and then allocate them to the individual units produced. It is a cost accounting system in which direct costs are traced and indirect costs are allocated to processes carried out in different departments. Processing cost is used when nearly identical units are mass produced.

Examples:-1)-Oil refineries

2)-Paint and chemical products

3)-FMCG products

ekkarill92 answered 1 year ago
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