Asked by Justin Robles on May 21, 2024
Verified
Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. A number of companies in different industries are listed below:1. Construction company that builds office buildings2. Winery that produces a number of varietal wines3. Cement manufacturer4. Mushroom farm that produces the standard button mushroom in caves5. Aluminum refiner that makes aluminum ingots from bauxite oreRequired:For each company, indicate whether the company is most likely to use job-order costing or process costing.
Job-Order Costing
An accounting system used to assign manufacturing costs to individual products or batches, making it possible to track the cost of specific jobs or orders.
Process Costing
An accounting methodology used for homogenous products that accumulates direct and indirect costs, and then assigns them to units of output on an average basis.
- Distinguish between job-order costing and process costing systems and ascertain their suitable deployment across diverse sectors.
Verified Answer
LF
Lenora FletcherMay 24, 2024
Final Answer :
1. Construction company that builds office buildings; Job-Order Costing2. Winery that produces a number of varietal wines; Job-Order Costing3. Cement manufacturer; Process Costing4. Mushroom farm that produces the standard button mushroom in caves; Process Costing5. Aluminum refiner that makes aluminum ingots from bauxite ore; Process Costing
Learning Objectives
- Distinguish between job-order costing and process costing systems and ascertain their suitable deployment across diverse sectors.