Do maufacturing companies use process costing system or job-order costing system?
The proper answer to your question is ” depends on the the size of the company” Many small manufacturing business will use the per job system. That is because each job is different from the last one. Such as a “job shop” This business makes custom parts or orders for customers. My brother owns a small “job shop” in Phoenix his customers are large Aero Space Companies. He controls his business by knowing the costs involved with each project or job he does. When I was with the Fortune 50 company. They used the process system, they also did by the job also so they could locate any cost saving or differences between facilities. It depended upon new product roll out and material issues, as well as union contracts etc. If you want more info, please contact me.
