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Running head: DISCUSSION BOARD #2 0

Discussion Board #2

Paul Rodgers

Discussion Board #2

Job costing is the ability to account for those activities that result in the manufacturing of a unique custom order product (Hicks, 2010). Berry Door & Window in the St. Louis area installs windows, doors, and garage doors. The company must allocate all of the materials, overhead, and labor that is attributed to each job that is performed. Construction executives keep close tabs on overhead. Knowing how much of the firm’s costs are overhead is helpful in pricing new jobs because that allows the firm to include enough markup to cover overhead, and profit becomes that much easier (Moldof, 2014). Billy Goat Bicycle Company must keep tabs of all costs associated with new bicycle sales and repairs. Some of the cost that are included is the employee that repairs each bicycle and the parts that are needed to get this customer back on the trail.

Process costing is a product costing system that accumulates costs according to processes or departments and assigns them to a large number of nearly identical products (Blocher, Cokins, Juras, & Stout, 2016). Purina is headquartered in the St. Louis area offering many choices in dog and cat food. The company must account for all of the materials and ingredients that are used in making pet food. Purina will analyze all of the customer and product profitability to see where improvements can be made. Energizer Holdings, Inc. is known for making batteries, chargers, and lighting products. Each department must look at all of the products and analyze all of the cost associated with each item. The cost may even include materials, waste, recycling, and government regulations. The upper management must find ways to run as efficiently as possible. Lean manufacturing places emphasis on the flow of materials from when a product begins to be manufactured until it is completed (Cuartrecasas-Arbos, Ruiz de Arbulo Lopez, & Santos, 2013).

Conclusion

Management must focus on all of the cost associated with the job that is before them. The job costing system can deal with each aspect of a construction job. Management can look at all of the cost and increase the labor and materials that are charged to each customer. A process cost system will see if the organization has a competitive strategy to produce a number of the same product.

Blocher, E. J., Cokins, G., Juras, P. E., & Stout, D. E. (2016). Cost management: A strategic emphasis. New York: McGraw-Hill.

Cuartrecasas-Arbos, L., Ruiz de Arbulo Lopez, P., & Santos, J. F. (2013). Lean manufacturing: Costing the value stream. Industrial Management & Data Systems, 113(5), 647-668. doi:http://dx.doi.org.ezproxy.liberty.edu/10.1108/02635571311324124

Hicks, M. (2010). Accounting for decision making: A study guide. Raleigh: Synergistics Inc.

Moldof, A. (2014). The important basis of job costing construction: The case for a three-tier general ledger job cost numbering system. Construction Accounting & Taxation, 24(5), 43-47. Retrieved from http://ezproxy.liberty.edu/login?url=http://search.proquest.com.ezproxy.liberty.edu/docview/1628369153?accountid=12085