Question

Job-Order Costing

Using google and your own previous knowledge of companies that you are familiar with - perform some research and identify a company you think would be an ideal candidate to use job order costing.

Please be sure to include:

• Name of company
• Website (if available)
• What do they make (or service they provide)
• What about their product/service makes you think would make them a good candidate for job order costing

Optional:

• If the company has any videos or links you can share that show manufacturing process - feel free to include.  

Respond to other students in any of the following ways:

o             Build on something your classmate said

o             Explain why and how you see things differently

o             Ask a probing or clarifying question

o             Share an insight from having read your classmate’s posting

o             Offer and support an opinion

o             Expand on your classmate’s posting

Answer 1

Ans: Job Order Costing- Companies that manufacture varied range of products or provide number of services use Job Order Costing. Therefore, this type of costing is widely used in manufacturing as well as service industry. It is used when a company receives order as per their need and requirement i.e., customised order or services. the customised orders are known as "Job" and it Job has a different product. The cost record for each individual job is maintained separately because each job have a different product and requirement and, therefore, different cost is associated with it. Under a job order cost system, the three basic elements of costs are direct materials, direct labor, and factory overheads are accumulated according to assigned job numbers.

The per unit cost of a particular job or order is computed by dividing the total cost allocated to that job by the number of units in the job. The per unit cost formula is given below:

Per unit cost = Total cost applicable to job / Number of units in the job

Job order costing is extensively used by companies all over the world. According to a survey, approximately 51.1% of manufacturing companies in United States employ job order costing. Companies that manufacture clothes or food companies etc use Job Order Costing. Also, organization providing services use Job Order Costing, for e.g., Law firms, Hospitals, Movie Producers, Accounting and consulting firms, etc.

As per my knowledge, service organization that is ideal for using Job coting is.

Name: Deloite

Website: www2.deloitte.com

What do they provide/make: They provide services of taxation, consultation, mergers and acquisition, audit and assurance, risk and financial advisory.

Their product/service makes you think would make them a good candidate for job order costing: They work with different clients on unique accounts. Also they use resources and time as per the need of the clients. So, to track how much time and resources were used for each customer, job order costing would be ideal for this service organization.