Purchase Solution

Costing Processes

Not what you're looking for?

Ask Custom Question

SAC has developed revolutionary manufacturing techniques utilizing its new spark plug manufacturing technology to offer special-order spark plugs for the auto racing industry. The company is currently using process costing for its spark plugs but is considering using job order costing for the new specialty spark plugs. How does job order costing differ from process costing? Should SAC use process or job order costing for the specialty spark plugs? Make a recommendation for SAC. Be sure to fully back up your recommendation.

Purchase this Solution
Solution Summary

Solution discusses the Costing Processes

Solution Preview

SAC has developed revolutionary manufacturing techniques utilizing its new spark plug manufacturing technology to offer special-order spark plugs for the auto racing industry. The company is currently using process costing for its spark plugs but is considering using job order costing for the new specialty spark plugs. How does job order costing differ from process costing? Should SAC use process or job order costing for the specialty spark plugs? Make a recommendation for SAC. Be sure to fully back up your recommendation.

Concept of Costing
Costing is the amount used to offer a particular product or service. Costing can be divided into three elements:
1) Material cost
2) Labour cost
3) Expenses
Further there are two categories of costing:
1) Job costing
2) Process costing

Meaning of Job costing
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 ...

Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance

These questions will test you on your knowledge of finance.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Introduction to Finance

This quiz test introductory finance topics.

View More Free Quizzes
Related BrainMass Solutions

  • Job costing,Process costing,operations costing

    Operation costing Operations costing is the mixture of job-order and process cost systems. Companies which manufacture goods that undergo some similar and some dissimilar processes use operations costing system.

  • Activity-Based Costing

    ABC is a cost accounting methodology that can define processes, identify the cost drivers of those processes, determine the unit costs of products and services, and create reports on agency components that can be used to generate activity- or performance-based

  • Can job-costing system or process-costing system be used?

    Your tutorial is 213 words plus one reference and explains why job costing must be used in some production processes and process costing in others. It explains why they are not interchangeable.

  • process costing methods

    However, I expect that even at that stage there will be some common processes. So the costing system at that stage will have the features of both job and process costing.

  • ABS vs ABM activity-based costing (ABC) with activity-based

    It seeks opportunities to redesign business processes. It helps eliminate waste and improve the profitability of all products. In practice activity-based management improves cash flow, performance measures, business processes, and economic value.

  • Impacts of Changing from Hydrometallurgical to Pyrometallurgical

    If both processes used continuous methods of extraction, then there will be no considerable impact in the costing system, that is, the company will still be using a process costing system.

  • Cost accumulation system

    .// The company uses process costing method through accumulated cost in its different processes over the specific period of time when each part of its final product is manufactured.

  • Activity Based Costing and Traditional Costing

    In activity-based costing, the primary goal is to make indirect costs meaningful so that they can be assigned to processes to determine how costs are incurred.

  • identified data for a typical month

    In activity-based costing, the primary goal is to make indirect costs meaningful so that they can be assigned to processes to determine how costs are incurred.

View More Related Solutions