Chapter 4

Question 1

Which costing system is more costly to use, Job Order Costing or Process Costing?

Answer 1

Job Order Costing

Question 2

When should you use process costing and job order costing?

Answer 2

use Job Order Costing if:
-product is customized

use Process Costing if:
-you are continuously making same product

Question 3

How is the Unit-Cost computed in Job Order Costing? What about with Process Costing?

Answer 3

Job Order Costing
(Total Job Cost / # of units)

Process Costing
(Total Manufacturing Costs / Equivalent Units (EU) produced during the PERIOD)