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    Consider the following scenario:
    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:

    Compare and contrast job order costing to process costing methods.
    What kind of system works best in what kinds of companies?
    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 Preview

    Compare and contrast job order costing to process costing methods.
    What kind of system works best in what kinds of companies?
    There is a difference between job costing and process costing. Job costing means calculation of costs in different manufacturing batches or costs in construction jobs. The purpose of job costing is to identify the costs according to the job or batch. For instance, batches of different specifications are likely to cost differently. On the other hand process costing means assigning costs to different manufacturing processes. The average cost per unit is calculated by dividing the total cost by the number of units produced.
    So, ...

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