Description
1- Pretend you are a manager of an advertising agency or a major bank. Describe which cost system is appropriate and how you would implement a job order costing system. Identify what type of costs (direct materials, labor, overhead, etc) should be included in each process.
2- The president of the Gulf Coast Refining Corporation wants to know why his golfing partner, who is the chief financial officer of a large construction company, calculates his costs by the job, but his own corporation calculates costs by large units rather than by individual barrel of oil. Discuss the differences between the two companies and when job order or process costing might be appropriate. Provide specific examples.