Choice Costing Systems Assignment Example | Topics and Well Written Essays - 750 words

Choice Costing Systems - Assignment Example From the article, Dream Chocolate Company in their process of choosing a costing system they are considering the key activities of job order costing, accounting for the costs, costing process, operation costing, information of accounting systems and their activities based on cost. By considering these activities, D.C has been able to follow the flow of costs in every stage of production. However, costing system in the company has been a challenge and, therefore; it requires a new costing system that will provide an estimate of costs that are accurate. The company needs a costing system that will make sense to its business that is small but needs to grow, (Kip Krumwiede and Darrell 2013).The sales of D.C Company depend much on the availability of events that vary with time. Special events vary normally with months, and this has not been easy for the company in choosing its costing system. On the other hand, Ruger Corporation has been able to analyze its production activities with thei r corresponding costs. The costs are recorded into the rightful accounts, which help in describing the costing system. In the costing system of Ruger Corporation, job order costing has been used to show a conceptual overview of the flow of costs. The cost of raw materials, for example, is recorded in the asset account and not in the overhead costs account. The purchase and issue of raw materials are recorded every month and any additional or reduction of the raw materials is easily noticeable. This indicates that there is a change in the production output volume in either an increase or a reduction depending on the raw materials’ volume purchased. Their job order costing system involved considering the labor costs, manufacturing overhead costs and the nonmanufacturing costs.