Analyzing Financial Statements for Planning and Cost
Analyzing Financial Statements for Planning and Cost
ACCT614-1304A-03
Phase 2 Individual Project Task 2
Professor Monica Hubler
10/28/2013
EEC has recently introduced a new memory chip, which is 1.5 gigabytes of computer memory. Based on my findings, and Eddison’s Electronic Company Journal Entry from 2005, I have determined if we should utilize a job order costing system, which is a costing system where costs are collected and assigned to units of production for each individual job, or process costing system, which is a costing system that accumulates production costs by process or a department for a given period of time. I also determined if we should report the cost of the new product, determine how these two systems are different and I have also identified the cost driver and how the process of tracking the costs works (M.U.S.E., 2010).
Job order cost system tracks specific costs to specific jobs being done. Contractors fulfill contracts for a specific product. For instance, a commercial airplane, a custom home or someone’s company winter ad campaign would be good examples of a specific product. The specific amount of labor and materials attributed to each specific job would have to be tracked. The job order system requires much more detailed data from the data collected. Although companies that make differential output would be much better candidates for job order costing as opposed to the process costing system. Job order costing and the process costing system are different because processing costing captures costs and averages over the volume of identified or similar units are made. And the costs are assigned to each unit. Job order costing tracks specific cost to specific jobs that are being done (M.U.S.E., 2010).
The process costing system is a system in which all costs are captured and averaged over the volume of identified or similar units that are made. An average of all costs is assigned to each unit and
ACCT614-1304A-03
Phase 2 Individual Project Task 2
Professor Monica Hubler
10/28/2013
EEC has recently introduced a new memory chip, which is 1.5 gigabytes of computer memory. Based on my findings, and Eddison’s Electronic Company Journal Entry from 2005, I have determined if we should utilize a job order costing system, which is a costing system where costs are collected and assigned to units of production for each individual job, or process costing system, which is a costing system that accumulates production costs by process or a department for a given period of time. I also determined if we should report the cost of the new product, determine how these two systems are different and I have also identified the cost driver and how the process of tracking the costs works (M.U.S.E., 2010).
Job order cost system tracks specific costs to specific jobs being done. Contractors fulfill contracts for a specific product. For instance, a commercial airplane, a custom home or someone’s company winter ad campaign would be good examples of a specific product. The specific amount of labor and materials attributed to each specific job would have to be tracked. The job order system requires much more detailed data from the data collected. Although companies that make differential output would be much better candidates for job order costing as opposed to the process costing system. Job order costing and the process costing system are different because processing costing captures costs and averages over the volume of identified or similar units are made. And the costs are assigned to each unit. Job order costing tracks specific cost to specific jobs that are being done (M.U.S.E., 2010).
The process costing system is a system in which all costs are captured and averaged over the volume of identified or similar units that are made. An average of all costs is assigned to each unit and