Description
Read the article, Information Usefulness and Usage in Business Decision-Making: An Activity-Based Costing (ABC) Perspective .In a 4 to 6-page written report, address the following questions in APA forma
1. Job order manufacturing and process manufacturing are two major costing systems used in manufacturing. Answer the following questions regarding these two systems:
a. Compare and contrast the two costing systems.
b. Which costing system should a service firm, such as an advertising agency use?
c. How do these two systems provide decision-making information?
2. Describe activity based costing.
Give two examples where activity based costing is preferable over traditional costing.
a. How is activity-based costing useful for decision making?
b. Discuss the three overhead rate methods used in activity-based costing and consider their relative usefulness.
Ensure to use intext citation and give 6 peer review references preferably scholarly journals.
Explanation & Answer
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Running head: JOB ORDER MANUFACTURING AND PROCESS MANUFACTURING
Job Order Manufacturing and Process Manufacturing
Student’s Name
Institutional Affiliation
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JOB ORDER MANUFACTURING AND PROCESS MANUFACTURING
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Job Order Manufacturing and Process Manufacturing
Part One
Job order manufacturing and process manufacturing are important production processes
that are applied in the manufacturing industry. Job order manufacturing is a system of assigning
manufacturing costs to individual products that are produced (Pollard, 2018). On many
occasions, costs are attached to each job order that goes through the manufacturing process. For
example, where a piece of furniture is to be produced, the costs would be assigned through job
order manufacturing since it involves the single order. For process manufacturing, costs are
accumulated for a long time and products are usually not easy to distinguish from each other. It
is mainly used where the product that is being produced is big enough and thereby can allow
costs to be accumulated for various processes that are employed towards the production of the
product or service. As a result, job order manufacturing is mainly used for unique products
whereas process costing is used for standardized products.
On the other hand, process manufacturing is a branch in manufacturing where formulas
and manufacturing recipes that are used in the production process (Rasiah, 2014). For example,
the production of 10,000 liters of gasoline would use process manufacturing since it is difficult to
distinguish the products that are being produced. In such a case, the cost accumulated in the form
of labor, oil, and...
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