Job Costing Is An Essential Learning Concept Within Cost Accounting

In response to Brittany Hill’s thread on Job & Process Costing Systems, I can easily say that she was very articulate in her passage. The thread is well detailed and presented in a manner that is not confusing to the reader. To begin with, it is important that she starts out by highlighting the differences between the two. For most people, costing systems can mean almost the same but as described by Cohen & Kaimenaki (2011), different situations will allow specific systems to be utilized. This is exactly what Hill has been able to communicate.

Essentially, with the current cost system, the managerial analysis is highly flawed due to a lack of crucial in-depth cost information, as indicated by:

| i. Specialty coffee roaster would use Job Order Costing. ii. Custom aircraft builder would use Job-Order Costing. iii. Brick Manufacturer would use Process Costing. iv. Microbrewery that produces a number of different beers would use Job-Order Costing. v. Steel company making chain link fences

The basic document for keeping track of costs in a job order costing system is a

As alluded in the introduction, the role and effective use of costing techniques may vary depending on a certain number of contextual variables and objectives. This section explores these variables and thus provides a critical assessment of the roles and uses of the techniques.

Traditional system of costing assigns manufacturing overhead based on the volume of a cost driver, such as the amount of direct labor hours needed to produce an item. A cost driver is a factor that causes cost to be incurred, such as machine hours, direct labor hours and direct material hours. According to the Association for the Advancement of Cost Engineering (AACE) International, Activity based costing (ABC) ‘is a total quality management tool for cost and performance measurement of activities, resources and cost objects.’

The target costing case literature contains numerous examples of Japanese cost management practices; however, few cases describe the use of target costing by large companies outside Japan. The purpose of the Mercedes-Benz AAV case is to consider the competitive environment of a leading German automotive manufacturer and the company 's response to changing competitive conditions. The teaching plan generally follows the suggested student assignment questions. In places, I recommend considering additional material during the case discussion. These questions are identified by a check mark.

Expenditure, in any budget, is shown in three categories: labor, materials, and services (sometimes called overhead and indirect cost). Within each element of the budget the items will be: fixed costs which are expenses that stay the same regardless of the amount of activity in the project or variable costs which are expenses that increase with the level of activity in the project. Labor costs consist of the wages, salaries and honoraria paid to individuals directly involved in implementing the project. Labor costs are calculated by multiplying the personnel time needed in the project by the unit cost of the resource.

Many managers often underestimate the power of target costing as a serious competitive tool. When general managers read the word “costing”, they naturally assume it is a topic for their finance or accounting staff. They miss the fact that target costing is really a systematic profit and cost management process.

In this assignment I will be discussing how costs incurred in any organization may be classified in a number of different ways for a number of different purposes. I will also be looking to find companies that use a variety of different costing techniques and methods. I will also be discussing the comparisons between marginal and absorption costing and how the concept of activity based costing can also be compared with these. To complete the assignment I will be using a combination of lectures notes, text books and the internet to research the various ways of cost classification, and how different companies use these, to enable me to answer the assignment question.

A survey in “Cost and Management Accounting Practices..” in the Management Accounting Research Centre indicate that job order costing is the primary method of costing in the following industries:

Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs:

This report will discuss what target costing in management accounting is, what the literature says about the chosen topic and evidence of target costing being used in companies.

In this assignment I will be discussing how costs incurred in any organization may be classified in a number of different ways for a number of different purposes. I will also be looking to find companies that use a variety of different costing techniques and methods. I will also be discussing the comparisons between marginal and absorption costing and how the concept of activity based costing can also be compared with these. To complete the assignment I will be using a combination of lectures notes, text books and the internet to research the various ways of cost classification, and how different companies use these, to enable me

Job order costing is a system of expense monitoring in which a business only creates products to fill customer/client orders. Employees complete job order cost sheets for each order and usually separate expenses into three main categories: direct material, direct labor and manufacturing overhead. Companies in many industries can use job order costing, though a variety of product offerings/services complicates the tracking of expenses.