It is now your second week working at Easy Laptops Pty Ltd, the large laptop manufacturer. You recently received your full license and enjoy the long drives from your rental property in Richmond, Victoria to their state-of-the-art production facility in the outskirts of Melbourne. Easy's entire production process is fully automated with the laptops produced sold in both domestic and international markets. Which of the following statements about job costing and process costing for Easy Laptops Pty Ltd is likely to be true? 1. Easy Laptops would likely use process costing 2. Easy Laptops would likely use job costing 3. The choice between process costing and job costing for Easy Laptop is driven by the fact that it produces identical units of output in large quantities Group of answer choices a) Statement 1 only b) Statement 2 only c) Statement 1 and 3 only d) Statement 2 and 3 only
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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