Processing costing is the most viable accounting method to be used by Ada Wilson Factory to account for the cost of manufacturing NFL footballs. The process costing method will be used because the Factory produces NFL footballs in large quantities, and the products are similar. In addition, the method assumes that the cost of each NFL football produced to be the same as the cost of every other product. Therefore, ensuring that costs are accumulated over a fixed period, summarized, and then assigned to all the NFL footballs consistently produced during a specified period. The method also helps the Factory determine if sales fully compensate the incurred costs during manufacture. Hence, making the technique a more appropriate accounting tool because the Factory does not manufacture its products individually.
The job costing method will be used for this case because costs will be accumulated and be assigned to Wilson footballs. In addition, this type of production process will have mass manufacturing and some customized elements hence making the job costing method more appropriate. The job costing method will also trace specific costs caused by varying sizes and quality of leather, and the results from tracing can be used to examine the cost to see if they can be reduced in later jobs. The method is also applicable to the case due to its capability to determine if any excess cost incurred can be compensated by sales. Under the assumption, there is the manufacture of products with different sizes and quality but are similar. This means that the manufacturing process will be different from separate products. Therefore, the job costing method will ensure manufacturers’ accountability since the products are manufactured individually.
Work Cited
Kohnehpoushi, Saman, and Reza Jamei. “Feasibility of Implementation of Target Costing System on Iranian Mehr Housing Project.” International Academic Journal of Economics, vol 05, no. 02, 2018, pp. 79-88. Bonfring, Web.