Your CFO, in her initial work, needs to decide whether to set up a job order costing system or a process type costing system. She has asked you to make a recommendation based on the following information. You plan to meet with her in the morning. Write 4–6 paragraphs in response to the following, and provide support for your recommendation:
- Compare and contrast job order costing to process costing methods.
- What kind of system works best in what kinds of companies?
- What kind of system makes sense for your company, given that you plan to start with only one version of your product but at some point in the future may offer a variety of options?
Recommendations for Responding to Peer Posts
- Review a peer’s post that made a recommendation for the costing method that you did not. Did any of the points he or she made make you reconsider your position as to which costing method would be best?
- If so, what points made you change your mind?
- If not, what additional arguments can you make that would directly refute the points that he or she made.