Friday, September 3, 2010

Job order cost accounting system or process cost accounting system.

A manufacturing company may choose to use either a job order cost accounting system or a process cost?

Yes. If the manufacturing company uses a custom tailored manufacturing process for each specific individual job, a job order cost accounting system would be the best to use. For example, an artist who makes custom pieces for clients would fair best using a job order cost accounting system.

On the other hand, if the manufacturing company mass produces its products, it should use a process cost accounting system. For example, a scissor manufacturing company that makes 10,000 scissors a month would be best with a process cost accounting system.

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