1) Product costing systems:

-Job order costing: The costs are accumulated per job, it is used by comapnies with limited quantities of products and it is used for unique products (customized products). It calculates the cost of a nuit or set of units in a given order, refered to as a job.

-Process costing: The materials, labor and overhead costs are accumulated per production process or department. It is used by companies operating in mass production of similar or identical products.

2) Differences: The job order costing sets a cost for each unit produced and it is different for each one of them while the process costing divides all of the costs by all the units produced.

3) Characteristics of companies that would use them: The job order costing would be used by small companies with limited materials and comapnies who specialize in custom products. The process costing would be used by large companies who produce in mass production.

4) Three valuation method alternatives:

-Asset-Based Approaches: They total up all of the investments in the business.

-Earning Value Approaches: They have the idea that a business's true value lies in its ability to produce money in the future.

-Market Value Approaches: It compares the business to similar businesses that have recently sold. This method only works if there are enough similar businesses to compare.

QUESTION 1What examples can you think of to show any of these approaches? Sometimes I find that relating a definition to something makes it easier to remember.

QUESTION 2Seong-Rin et al (n.d) applied a life-cycle costing methodology to evaluating the environmental and economic benefit of two different water network systems to evaluate which is the better system. This method was particularly effective in this study as the objective of the authors was to identify the best sustainable solution to implement. By understanding the research and development component versus production they were able to determine the cost of production versus cost of development and evaluate the sustainable production levels for each alternative (Seong-Rin et al n.d). The ability to also identify the cost of replacing or removing the systems once they were obsolete was also included in the calculations, which is an important element of sustainable costing (Seong-Rin et al n.d.). What are your thoughts?