Synthesize course material and demonstrate critical thinking, graduate-level writing skills, and mature reflection.


* In current SPA format

* 200-350 total words

* Use at least 2 searchable scholarly journal articles

* Please use persistent links! I have to be able to click the link and go to the website/journal article

* No plagiarism!

Submit a meaningful reply of 200–350 words to a classmate’s thread.

Synthesize course material and demonstrate critical thinking, graduate-level writing skills, and mature reflection. Cite the textbooks and scholarly articles from professional accounting and business journals. Use at least 2 journal articles.

In your replies, demonstrate mature analysis, synthesis of all course materials, tact, and insight. For each reply, reference the textbooks, at least 2 journal articles, and the correlated thread. Opinion is worth little unless it is supported by quotes and/or paraphrases from the textbooks and professional journals. Remember that doing the minimum could result in a minimum grade.

Must use persistent links!


When Companies are Likely to Use a Job Costing System or a Process Costing System

Job costing process constitutes the detailed accumulation of manufacturing costs attributed to certain groups of units or units. For instance, job costing can be used to account for the construction of custom-made pieces of furniture (Zahara and Thornton, 2001). All the labor costs from the production of the furniture is recorded in a time sheet and recorded on the job cost sheet. In the same manner, other parts and wood used in building the furniture is charged on the on the production job connected to the furniture. This data is then used to bill the customer on the materials used and labor used and also to track the profitability of the company (Blucher, Coins, Stout, and Auras, 2016, p.99).

Process costing then again create the costs collection for long creation forms which include undefined items from each other. For instance, the production of 90,000 gallons of gasoline would call for all the crude oil used, the labor applied in the refinery plant added into a cost account, then divided by produced units to get cost per unit (Norseman, 2006).

Job Costing and Process Costing Systems Characteristics

The primary characteristics and differences between job costing systems and process costing systems:

  • Product uniqueness: Job costing is used for the distinct products while process costing is used for common products.
  • Job size: Job costing is applied for relatively small production projects because materials and time have to be charged to specific job. On the other hand, process costing is applied for the larger projects (Kissinger, 2009).
  • Record keeping: job costing require a lot of record keeping since every job requires time and material. Costs are aggregated in the case of process costing leading to fewer records.
  • Customer billing: job costing usually require customer billings because it gives the specific amount of cost utilized by the projects assigned to customers.

Examples of Job Costing and Process Costing Systems

Job Costing System

Century Construction Company (in Virginia)

In Century Construction Company, job costing involves accumulation of costs of labor, material, and other overheads for a given job. These costs are added together, then divided over every unit housing. This way the company is able to determine the costs at which it can sell the products (Blucher ET AL., 2016).

Hooligan Construction Company (in Virginia)

In Hooligan Construction Company, job costing is applied to accumulate the costs of small-unit levels. The system is used to derive the cost of building a custom machine, building construction, and manufacturing smaller batches of building materials. “Once a job is complete, the actual indirect amount may be determined” (Hicks, 2010, p.38).

Process Costing System
Virginia Cartesian Bottling Company (In Virginia)

Virginia Cartesian Bottling Company bottles soda. The company does not find it financially feasible to separate and record the cost for individual bottles. The costs are therefore assigned to the entire bottling process for a period of time.

International Paper (In Virginia)

International Paper saw the need to redesign one of its primary plants in Virginia to meet the global standards and to increase production efficiency. The redesign plan involved a number of changes in the manner in which the production process will operate including changes in product mix, new methods to handle the materials, treating the plant wastes within the plant as opposed to offsite treatment and segregating wastewater flows. The redesign cost was much lower and also projected to have lower operating costs.


Job costing and process costing relate to how expenses are tracked compared to output.  Determining how to allocate costs is important because if costs are not allocated correctly, products and services may be priced incorrectly (Hicks, 2010).  Companies use job costing to allocate costs toward a specific contract or project.  This type of costing is common among construction, engineering, architecture, consulting, and other types of contract-based firms where resources are limited by the project manager (Faye, 2001).  Process costing focuses on accurately accounting for all expenses incurred during production of similar or homogeneous products (Blucher, Stout, Auras, & Coins, 2016).  Manufacturing, educational, refinement, and other process-oriented companies utilize process costing.

Budweiser operates a distribution center in Lynch burg, VA.  The process of receiving bulk shipments of beer, reorganizing them into smaller shipments, and distributing the smaller shipments to retailers makes use of process costing.  Likewise, Frito Lay in Lynch burg uses process costing to account for incoming shipments of potatoes and corn.  The process costs associated with Frito Lay consist of receiving, preparing, cooking, packaging, and shipping finished product.  Modern process costing is often activity-based in order to account for as many of the peripheral or support departments’ costs as possible (Offenbach, 2004).

Coleman Adams Construction is also based in Lynch burg.  This construction company uses a job costing model that tracks project costs from planning through completion.  Hurt & Profit is an engineering firm that also uses job costing to determine each project’s expenses.


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