What is the best option for this question? Is it job costing or is it process co

Question

What is the best option for this question? Is it job costing or is it process costing?

Cassiopeia, Inc. produces and sells two different pillow lines: Fluffy & Firm. The company produces these products in a joint process across two departments (sewing and assembly). The sewing department is highly automated with the use of sewing machines and robotic arms that move materials from station to station. The assembly department requires more labor intensive activities. The assembly department is not automated, because the robots have not been programmed to properly handle the delicate stuffing materials. In fact, the robots would shove the stuffing directly through the fabric. Prior to Black Friday (peak pillow season), Cassiopeia engineers attempted to reprogram some of the robots to stuff pillows and save money on overtime, but were still unsuccessful. The following is a listing of some of the costs incurred at Cassiopeia: Materials (direct & indirect) Fabric, stuffing (polyester fiber fill) or foam, thread, zipper/button/Velcro closing, tags with care instructions & material information Labor (direct & indirect): cutting, sewing, assemble pillow (turn material right side out, stuff, then close), testing pillow (QC), supervisors, marketing, accounting, sales, etc. Overhead: rent, insurance, electricity, garbage removal, etc. Would Job Costing or Process Costing be more appropriate for this company? Please provide a comprehensive rationale for your decision. This should be at least one paragraph in length and should include at least two external resources (other than the textbook). If job costing is more appropriate, please refer to the additional information on the page labelled Option A: Job Costing. Please ignore the page labelled Option B: Process Costing. If process costing is more appropriate, please refer to the additional information on the page labelled Option B: Process Costing. Please ignore the page labelled Option A: Job Costing.

Explanation / Answer

The answer would be Process Costing.

There are various methods of costing a product which includes process costing and job costing. Job costing is used in production of units which are unique, not standardized but customized as per the needs of the customer. In this costs incurred in carrying out a particular job for a particular customer or line of customer is computed.

Whereas Process Costing will be used in the production line where two or more departments work with each other in a process to produce goods which are standardized in nature. Process costing is more suitable for the lare production units with high overheads.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.