Watkins Trophies, Inc., produces thousands of medallions made of bronze, silver, and gold. The medallions are identical except for the materials used in their manufacture. What costing system would you advise the company to use, and why?

• I am not sure if I have answered process costing well relating to the question. Any other detail or feedback would be appreciated.

Ans :

Process costing would be advised as Watkins Trophies Inc produces thousands of medallions which is a single type of product. Although, there are differences in material being bronze, silver and gold, the final product will remain the same. In this case, the company produces identical products of medals therefore process costing is preferred. Process costing would make it easy to track the costs as the same products are being produced and company does not have to keep record of separate set of data. The manufacturing costs can be easily identified and assigned to each product in process costing. Since there are different types of metals, they will be separate in each batch.