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    Costing Systems: Job Order VS Process Cost

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    Please help with the following problem.

    Identify which costing system (job order or process cost) the following companies would primarily use: (a) Quaker Oats, (b) Ford Motor Company, (c) Kinko's Print Shop, and (d) Warner Bros. Motion Pictures.

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    SOLUTION This solution is FREE courtesy of BrainMass!

    Identify which costing system?job order or process cost? The following companies would primarily use:

    As per wisegeek.com, "Job costing is the process of determining the labor and materials cost for each job in a systematic way, and then using this information to create a quote for the customer." Thus job costing is a method of costing where for each job the cost is ascertained. This is because each job is different in nature and hence separate quote is required. Job here means a group of small activities which we can ascertain in any goods' production.

    Meaning of Process costing
    As per svtution, "Process costing is famous topic of cost accounting. It is that method of costing which is used at that industry where production is done in step by step process. Every finished goods of one process will be the raw material of other process and production is continually operating in factory. At that time we calculate first process cost by making process account. A process account is made for every process of production. "

    The differences between job order costing and process costing are:
    The first is that the flow of units in a process costing system is more or less continuous, and the second is that these units are indistinguishable from one another. A further difference between the two costing systems is that the job cost sheet is not used in process costing, since the focal point of process costing is on departments.

    Read more at http://www.accounting4management.com/similarities_and_differences_between_job_order_and_process_costing.htm#SGOhxbTrAXVgOKCt.99

    (a) Quaker Oats: Process costing
    (b) Ford Motor Company: Job Order
    (c) Kinko's Print Shop: Job Costing
    (d) Warner Bros. Motion Pictures: Job costing

    1. http://www.principlesofaccounting.com/chapter%2019.htm
    2. http://www.wisegeek.com/what-is-job-costing.htm
    3. http://www.svtuition.org/2010/10/job-costing.html.

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