buiz-Chapter 3 1. An umbrella manufacturer has three departments for production. The handle is produced in the first department, with the second department attaching the fabric to the handle, and the third department used for packing and distribution. If all umbrellas produced are similar but can vary by size or color, should the business use a job order or process cost system? 2. A manager for a new business is trying to decide which type of cost system to account for the costs incurred during production. The business will manufacture high-quality rugs according to customer specifications. Once the customer specifications are determined for each order, the company will acquire the inputs needed. Would a job order or process cost system be best for the manager? 3. A clothing manufacturer produces 10 types of shirts, which are produced on a schedule set by management. Costs incurred in the production facility in a day are allocated to the type of shirt produced on that day. Is the company using a job order or process cost system? Strategy: Process cost systems are used when all finished goods in a batch are exactly the same. Since all goods will require the same inputs, the costs are allocated to the entire amount produced, which will then be allocated by the number of goods. O BI