ACC 406 Chapter 5: Chapter 5 - Job Order Costing
6 Mar 2012
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Characteristics of the production process will determine whether it is a job or process. Firms produce large quantities of similar or homogenous products y ex: food, cement, petroleum, and chemical firms y. One liter of paint is the same as another liter, one bottle of aspirin is the same as another. Cost of one unit or a product is identical to the cost of another. Process firms accumulate production cost by process or by department for a given period of time, output for the process for that period of time is measured. Unit costs are compared by dividing process costs for the given period by the output of the period. Firms operating in job order industries produce a wide variety of services or products that are quite distinct from one another y customized or built to order products fit into this category.
