Sample Creative Writing On Companies Should Consider Their Process And Products Before Deciding On The Accounting System They Are Going To Adopt.

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Cost accounting system is a structure used by companies to approximate the cost of their products to allow profitability analysis, cost control and inventory valuation. There are two major cost accounting systems namely; job costing and process costing. Job costing system gathers all manufacturing costs discretely for each job. Process costing gathers all manufacturing costs discretely for each process.
Companies can decide to use both systems or use one of them. Companies are most likely to use the job costing system when company’s products are unique and when products are made based on specific clients order. Companies use process costing system when they produce similar units of product in bunches using a regular process (Bragg, 2013). Each cost accounting system has different specific features. Job costing characteristics include the following; gives each job a unique number that identifies the job, job cost reports enable comparison of actual expenditure with the budgeted amounts (Bragg, 2005). This helps determine the progress of the job among others. One main characteristic of process costing is that the process is controlled that is, the process is transparent. Another feature is process costing utilizes cumulative costs from each step of production. The last feature is that the process has to be continuous.
Coca Cola Company uses process-costing system. It accumulates the cost involved in its three-production stage, which require mixing and blending, bottling and finally inspecting, labeling and packaging (Kubiak, 2012). Chevron Corporation, which produces petroleum products, uses process costing. Boeing Company, which deals with commercial aero products, and Volkswagen Group, which focuses on automobile use job costing system.

References

Bragg, S. M. (2005). Controller's guide to costing. Hoboken, NJ: John Wiley & Sons.
Bragg, S. M. (2013). Accounting best practices. Hoboken, NJ: John Wiley & Sons.
Kubiak, T. M. (2012). The Certified Six Sigma Master Black Belt Handbook. Milwaukee: ASQ Quality Press.