While process accounting is for longer runs of similar/identical products, Ford may

While process accounting is for longer runs of similar/identical products, Ford may

While process accounting is for longer runs of similar/identical products, Ford may indeed use process costing for a portion of their production. We use process costing because it is more cost effective in many situations. Until a vehicle becomes customized with features, the product is really a process. In fact, at one time the Plymouth Voyager and the Dodge Caravan were customized from the same base model produced by Chrysler. This base model most likely used a process costing, while the specific cars created for Plymouth and Chrysler most likely used job costing. To be clear this is a hybrid system of costing (not the electric/gas type of hybrid).

As we move into an economy more based on mass customization, will hybrid cost systems increase?

Dr. Bill

Drobyazko, S. (2019, November). FORMATION OF HYBRID COSTING SYSTEM ACCOUNTING MODEL AT THE ENTERPRISE. ResearchGate; unknown. https://www.researchgate.net/publication/339068070_FORMATION_OF_HYBRID_COSTING_SYSTEM_ACCOUNTING_MODEL_AT_THE_ENTERPRISE

8/9/22, 10:39 AM

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