Question

Job-Order, Process, and Hybrid Costing Syste nise 12-2B Identifying the appropriate costing system LO 1 Crnoration's Morgan Plant in Jacksonville, Florida, produces the company's weed- chemical solution, Weed Terminator. Production begins with pure water from a con- lead stream to which the plant adds different chemicals in the production process. Finally, the bottles the resulting chemical solution. The process is highly automated, with different mputer-controlled maneuvers and testing to ensure the quality of the end product. With only 15 employees, the plant can produce up to 6,000 bottles per day. Carlos Corporation's control chemicals Required Recommend the type of costing system (job-order, process, or hybrid) Morgan Plant should use. Explain your recommendation.

Answer 1

Job order costing involves the detailed accumulation of production costs attributable to specific units or group of units.

Process costing involves the accumulation of costs for lengthy production runs involving products that are indistinguishable from each other.

Job costing is used for unique products, and process costing is used for standardized products.

In the above situation job costing is suitable since the bottling of chemical solution is very unique product and not a standardized product. There are two process involved in the above production process one is adding chemicals to the water and second thing is the bottling of the solution. Hence Job costing would be suitable.