JOB ORDER

Job order costing and process costing are two methods used in managerial
accounting to calculate the cost of producing goods or services.

Job order costing is used when products or services are unique, customized,
or produced in small batches. It involves tracking and accumulating costs for
each specific job, project, or order. Examples of industries that commonly use
job order costing include construction companies, custom furniture
manufacturers, and printing companies. In job order costing, costs are directly
attributed to specific jobs, allowing for accurate cost allocation.

On the other hand, process costing is used when products or services are
produced in a continuous and repetitive manner, typically in large quantities. It
involves averaging and allocating costs over a particular production process
or department. Industries such as oil refining, chemical manufacturing, and
food processing often employ process costing. In process costing, costs are
distributed evenly across all units produced within a specific time period,
resulting in an average cost per unit.

In simpler terms, the main difference between job order costing and process
costing can be summarized as follows:

1. Job Order Costing:

- Used for customized or unique products/services.
- Costs are tracked and accumulated for each specific job or order.
- Direct costs are easily identifiable and assigned to specific jobs.
- Indirect costs are allocated based on a predetermined allocation method.
- Total cost per job can be calculated accurately.
2. Process Costing:
- Used for standardized, repetitive production processes.
- Costs are averaged and allocated over a production process or
department.
- Direct costs are usually identifiable and assigned to the process.
- Indirect costs are distributed equally across all units produced.
- Average cost per unit is calculated by dividing total costs by the number of
units produced.

In summary, job order costing is used for unique or customized products,

while process costing is used for mass-produced, standardized goods. Job
order costing assigns costs to specific jobs, whereas process costing
averages costs over a production process or department.

1. Strategic management is about setting goals and creating action plans to

gain a competitive advantage. It involves figuring out what the company wants
to achieve and how to get there.Strategy is like a roadmap that outlines the
goals a company wants to accomplish and the specific steps it will take to
reach those goals. It's like having a game plan to win in a competitive
business environment.Strategic management is the process of identifying
these goals and action plans and then putting them into action. It's about
making sure that the company is moving in the right direction and taking the
necessary steps to stay ahead of the competition.In simpler terms, strategic
management is about setting goals and figuring out how to achieve them. It's
like having a plan to succeed in a competitive world.

2. Planning and decision making in business involve important tasks like

creating budgets, managing profits and cash flow, and making choices about
the company's operations. Two specific examples of these decisions are:a.
Lease or buy a facility: This decision is about deciding whether to rent a place
or buy it for the company's use. Renting gives flexibility but buying provides
stability. The choice depends on factors like money available, future growth
plans, and what's happening in the market.b. Introduction of a new product
line: This decision is about deciding if the company should create and sell a
new product or expand the existing ones. It requires looking at what
customers want, what the competition is doing, and if the company can make
the new product well. It also needs to consider if it will make enough money
and if it fits with the company's goals.In simple terms, planning and decision
making in business involve tasks like budgeting and making choices about
how the company operates. Examples include deciding whether to rent or buy
a place for the business and deciding if the company should create a new
product to sell. These decisions depend on factors like money available,
market conditions, customer preferences, and the company's goals.

3. Control in business involves two functions: operational control and

management control.1. Operational control: This is about monitoring the
activities of managers and employees at the operational or operating level. It
is typically carried out by mid-level managers, such as product managers or
department heads. Operational control focuses on ensuring that day-to-day
operations are running smoothly, efficiently, and in line with established goals
and standards. It involves tasks like tracking performance, overseeing
processes, and addressing any issues or deviations from the plan.
Operational control helps to keep operations on track and ensures that tasks
are being performed effectively at the operational level.2. Management
control: This function involves the evaluation and oversight of mid-level
managers by upper-level managers, such as the controller, CFO, or CEO.
Management control aims to assess the performance and effectiveness of the
mid-level managers in achieving strategic objectives. It includes activities like
reviewing financial results, analyzing key performance indicators, and
providing guidance and feedback to the mid-level managers. Management
control helps to ensure that the overall management team is performing well,
making sound decisions, and contributing to the company's success.In
simpler terms, operational control is about monitoring and managing the day-
to-day activities of managers and employees at the operational level, while
management control focuses on evaluating and overseeing the performance
of mid-level managers by upper-level managers. Both functions are important
in maintaining effective operations and ensuring that the management team is
aligned with the company's goals and objectives.
4. Preparing financial statements involves complying with the reporting
requirements of regulatory bodies like the SEC, BIR, or Central Bank. These
statements, such as the balance sheet and income statement, provide
information about a company's financial performance. Accuracy in financial
statements is important because it helps investors make informed decisions
about investing in the company. Accurate statements give a clear picture of
the company's financial health and help investors assess the risks and
potential rewards of investing.