Chapter 21, Problem 1Q

To determine

Job Costing: It involves products, which are unique or distinguished from other products. Because of the uniqueness of the product, the production cost is regarded for a specific product. It is used for short production runs.

Process Costing: It involves products, which are not unique or standardized products; it involves the products, which have long production runs.

To explain: Costing system that the given companies would use.

Explanation of Solution

(a)

Q Company

Costing system used by Q Company would be process costing.

Explanation:

Q Company is producing standardized product, which is also produced by many other competitors. Therefore, process costing will be used.

Thus, Q Company will use process costing.

(b)

J Company

Costing system used by J Company would be process costing.

Explanation:

J Company is producing standardized product, which is also produced by many other competitors, therefore process costing will be used.

Thus, J Company will use process costing.

(c)

G Company

Costing system used by G Company would be job costing.

Explanation:

G Company is producing unique product, which is not produced by any other company, therefore process costing will be used.

Thus, G Company will use job costing.

(d)

W Company

Costing system used by W Company would be job costing.

Explanation:

W Company is producing unique product, which is not produced by any other company, therefore process costing will be used.

Thus, W Company will use job costing