Submit a meaningful reply of 350-400 words to a classmate’s thread. For each reply, demonstrate analysis, synthesis of all course materials, tact, and insight. Reference the textbooks, at least 2 journal articles, and the correlated thread. Opinion is worth little unless it is supported by quotes and/or paraphrases from the textbooks and professional journals. Adhere to current APA format in all posts. Include Biblical integration in the analysis of each peer’s post.
TEXTBOOK:
Blocher, Juras, & Smith: Cost Management: A Strategic Emphasis
Cost Estimation and Profit Planning Discussion
In a job costing system, the jobs consist of individual products or batches of products or services. A job costing system is appropriate when most costs incurred for the job can be readily identified with a specific product, batch of products, customer order, contract, or project (Blocher et al., 2019). On the other hand, a process costing system consists of gathering costs for a much larger number of units being produced. Costing methods are selected based on the process for production and its intentions are to provide the most precise representation of the costs sustained during the production process.
The job-order cost method is appropriate when the products are manufactured in identifiable lots or batches, or when the products are manufactured to customer specifications. Job-order costing is widely used by custom manufacturers such as printing, aircraft, construction, auto repair, and professional services (Anta & Romania, 2018). The job costing system is typically used in areas where personalized services are offered, such as custom home building. The main characteristics of job costing include the following: 1) products/services produced when customer orders, instead of keeping a stockpile, 2) the costs are accumulated to each job individually, 3) job is performing specifically for the customer’s specifications, 4) each job performed differs from others and 5) each job requires special attention and skill in order to complete. advantages. A job order costing system uses a job cost sheet to keep track of individual jobs and the direct materials, direct labor, and overhead associated with each job (Franklin & Graybeal, 2019). Because each job in this system is unique and differs, this allows the organization to keep track of the costs per individual job. Maintaining this information is typically more expensive than process costing, and it is often used for the production of smaller, more individualized jobs because the benefit of knowing the cost of each product outweighs the additional cost of maintaining a job order costing system (Franklin & Graybeal, 2019).
Two local companies that use the job costing system are Thrive Home Builders and Bui Accounting Firm, both providing customized services. Job costing is the most accurate way to determine the costs and break down specific labor and material needs in order to perform the job. A custom home building contractor might work with a client to nail down the specific expectations for the finished product. Once the details are known, the contractor would use a job costing system to approximate the cost of building the home specified by the customer (Hood, 2020). At Thrive Home Builders, the company first reviews material costs, as these costs differ significantly based on the size of the home, the materials requested from the customer (brick, for example) and where the home is to be built. Labor costs are also considered during this process. The number of workers needed for the job and the hours that are needed to complete the work are considered in the labor costs. The location of the job can also impact labor costs by requiring you to provide transportation and potentially lodging to workers. Additionally, you may need to hire local workers instead – labor laws and taxes can vary depending on the location as well (Hood, 2020). Afterwards, overhead costs are then calculated for the job – however, these expenses typically do not fluctuate much. One overhead cost that can vary from one custom home build to another would be depreciation on company-owned equipment (not every job will require a bulldozer or a crane) (Hood, 2020). Sales and marketing expenses are also costs that could differ from job to job. Through the use of the job costing system, Thrive Home Builders can calculate all expenses involved for each project and provide their clients with consistent and accurate proposals. This process is similar at Bui Accounting Firm. Because accountants work with different clients, each with different and unique accounts/situations, using job process costing helps the company to track the time and resources used for each customer.
With process costing, companies determine item cost by tracking the cost of each stage in the production process, instead of tracking costs for each individual item – after adding up the cost of all the steps in the process, they divide the total cost by the number of items (cost per unit) (Clancey, 2020). Companies producing mass-produced goods are ideal for using the process costing system. Two local companies using process costing are Alpine Lumber Company and Northside Paint and Decorating (paint manufacturer). Because lumber and paint are made in uniform, the process costing system is ideal for these organizations. During the production process of lumber and paint, the products are required to move through more than one department – from procurement to manufacturing, for example. This system allows for better managerial control because each process can be evaluated at shorter intervals, it also allows for more overall flexibility.
From a biblical perspective, there are a few instances where the Bible mentions cost control and planning. Luke 14:28-30 states, “For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish – lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him saying, ‘This man began to build and was not able to finish.’”
References
Anta, D., & Romania, A. (2018). Job order-costing versus process-costing. Pennsylvania State University. Retrieved from
https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.523.3194&rep=rep1&type=pdf
Blocher, E., Stout, D., Juras, P., & Smith, S. (2019). Cost management: A strategic emphasis
(8th edition). McGraw-Hill.
Clancey, J. (2020). Process costing: Manufacturing accounting. Management Accounting.
https://doi.org/10.24053/9783739880280-328
Franklin, M., & Graybeal, P. (2019). Principles of Accounting (Vol. 2). Open Stax.
Hood, E. (2020). Costing basics. Apparel Costing, 3(1), 3–14.
https://doi.org/10.5040/9781350065437.0006
Criteria Ratings Points
Job Order versus
Process Costing
8 to >7.
0 pts
Advanced
Thread describes when
companies would use different
methods of costing.
7 to >6.0 pts
Proficient
Thread attempts to
describe when companies
would use different method
but doesn’t include both
methods
6 to >0.0 pts
Developing
Thread explains
each method but
doesn’t explain
when a company
would use it.
0 pts
Not
Present
8 pts
Evaluation
Characteristics
12 to >10.0 pts
Advanced
Thread clearly and explicitly
describes the characteristics
of both systems.
Characteristics are well
developed.
10 to >9.0 pts
Proficient
Thread does describe the
characteristics, but the
characteristics are not
clearly developed.
9 to >0.0 pts
Developing
Unclear
description of at
least one of the
systems.
0 pts
Not
Present
12 pts
Examples 16 to >14.0 pts
Advanced
Several appropriate examples
provided
14 to >12.0 pts
Proficient
At least two appropriate
examples provided
12 to >0.0 pts
Developing
At least one
appropriate
example
provided
0 pts
Not
Present
16 pts
Synthesis of
Material
Originality
19 to >16.0 pts
Advanced
Thread conforms to the
instructions. Content is well
developed. Included originality
of thought. Paragraph
structure and flow is excellent.
Analysis of the technique
selected is provided.
Questions are answered
thoroughly and supported
using substantial research
data
16 to >15.0 pts
Proficient
Thread conforms to the
instructions. Content is
developed but lacks
originality of thought. Too
many direct
quotations. Paragraph
structure and flow is
excellent. Analysis of the
technique selected is
provided. Minimal research
sources used
15 to >0.0 pts
Developing
Content is
organized based
mainly on text
little
collaborating
research data
0 pts
Not
Present
19 pts
Discussion: Cost Estimation and Profit Planning Grading Rubric |
BUSI601_B05_202220
Criteria Ratings Points
Replies: New
Information
10 to >9.0 pts
Advanced
Reply introduces new and
relevant information to the
discussion of management
technique
9 to >7.0 pts
Proficient
Introduces new information
with little relevance
management techniques
7 to >0.0 pts
Developing
Introduces new
information with
no relevance to
management
technique
0 pts
Not
Present
10 pts
Replies:
Evaluation
Research support
and originality
30 to >27.0 pts
Advanced
Synthesis of research data
Reply is well supported with
the referenced sources and
expounds on discussion of
technique
27 to >24.0 pts
Proficient
Minimum analysis of
researched data Reply
minimally referenced with
research sources
24 to >0.0 pts
Developing
Researched
provided but no
analysis of
information
0 pts
Not
Present
30 pts
Thread:
Grammar/Spelling
and APA
formatting
13 to >11.0 pts
Advanced
Student used correct grammar
or spelling errors
11 to >10.0 pts
Proficient
Only one minor error and 1
APA error
10 to >0.0 pts
Developing
Two grammar
errors and at
least 2 APA
errors
0 pts
Not
Present
13 pts
Thread: Text and
Journal Support
12 to >10.0 pts
Advanced
Thread contain appropriate
word count and content
supported with text and
relevant scholarly research
data
10 to >9.0 pts
Proficient
Thread contain appropriate
word count and content not
supported with text and
relevant scholarly research
data
9 to >0.0 pts
Developing
Thread had
irrelevant
scholarly
sources and
unsubstantiated
opinion
statements
Thread didn’t
satisfy word
count or contain
appropriate
scholarly
resources
0 pts
Not
Present
12 pts
Discussion: Cost Estimation and Profit Planning Grading Rubric |
BUSI601_B05_202220
Criteria Ratings Points
Replies:
Grammar/Spelling
and APA
formatting
20 to >17.0 pts
Advanced
No grammar or spelling errors
17 to >16.0 pts
Proficient
Only one minor error and 1
APA error
16 to >0.0 pts
Developing
Two grammar
errors and at
least 2 APA
errors
0 pts
Not
Present
20 pts
Replies: Text and
Journal Support
10 to >9.0 pts
Advanced
Reply contains appropriate
word count and content
supported with text and
relevant scholarly research
data
9 to >7.0 pts
Proficient
Reply contains appropriate
word count and content not
supported with text and
relevant scholarly research
data
7 to >0.0 pts
Developing
Reply had
irrelevant
scholarly
sources and
unsubstantiated
opinion
statements
0 pts
Not
Present
10 pts
Total Points: 150
Discussion: Cost Estimation and Profit Planning Grading Rubric |
BUSI601_B05_202220
