(TCO D) Compare and contrast job costing and process costing and give two examples of each. What is the difference between the weighted average process-costing method and the FIFO process-costing method?
Ques 1
| Ques 1 | |||||||||
| a.both assign direct costs to products and provide how to compute unit product costs | |||||||||
| b.the flow of costs through the manufacturing ledger account is same in both systems in basic terms | |||||||||
| c.Pocess costing is used for a product which is being mahufactured for a long time whereas job costing | |||||||||
| is used when there ar different jobs worked on each period | |||||||||
| d.process costing adds up costs by department whereas job costing accumultes according to individual | |||||||||
| jobs | |||||||||
| examples | |||||||||
| Process costing | |||||||||
| a manufacturer of fiberglass insulation | |||||||||
| b.mixing and bottling of Pepsi | |||||||||
| Job costing | |||||||||
| a. a pumbling contractor | |||||||||
| b. custom interior designer | |||||||||
Ques 2
| Weighted average | FIFO | |
| cost flow assumptions | averages the cost of units in beginning inventory to cost of units at the beginning period | assumes the units are complete before any new units are commenced |
| Units | takes both the units in beginning inventory with that units started during the period | it separate unites in beginning inventory from those that were startd during the current period |
| Costs | similar procedure to above it combines the costs | it separates the costs |
| Advantages | more frequently used than FIFO | Is more practical to match the flow costs and hence more accurate than weighted average |
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