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Compare and contrast job order costing to process costing

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Your CFO, in her initial work, needs to decide whether to set up a job order costing system or a process type costing system. She has asked you to make a recommendation based on the following information. You plan to meet with her in the morning. Write 4ââ?¬"6 paragraphs in response to the following, and provide support for your recommendation:

1. Compare and contrast job order costing to process costing methods.
2. What kind of system works best in what kinds of companies?
3. What kind of system makes sense for your company, given that you plan to start with only one version of your product but at some point in the future may offer a variety of options?

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Solution Summary

Complete discussion of the two types of costing systems including practical examples on the types of businesses suitable for each. 407 words.

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Q1& 2: I have attached a discussion which will help you think through the issues. It isn't really a "management decision" about ...

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Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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