Question

You are a new blue jeans manufacturer and is starting operations this month. You must decide on which cost accounting system to use in order to account for your manufacturing costs. You can choose from using the job order cost system or the process cost system.

What system would you choose and why? Please be detailed in your answer as to why you chose the specific system.

Answer 1

As far as my personal knowledge and opinions are concerned, I would like to choose process cost system to be adopted to account for the costs in my organization.

This system was adopted because manufacturing of jeans is normally done through various processes and then.finally the product is manufactured.

By adopting this, I can also know where to allocate special time in order if any case regarding the quality of the product arises in future , which will help me to make my product reach the market in the beginning and later can be helpful to capture the market in a less time when certain qualitative standards are followed in production activity.

Some may also opt for order costing system but, regarding my interest I chose process cost system.

This is brief regarding adoption of process cost system and we can.get clear understanding if we go into the depth of the subject regarding process costing.