Chicago Business Daily

Are selling toys and games consider a job order cost system or a period cost system?

I am really confused with this one for some reason. maybe because its toys and games. Please help me, I Really need your help. please dont give me an answer that doesnt make sense.

Public Comments

1. Let me try and help. Lets start here, job costing is the process for accounting for all the cost of a specific job. So lets say I build homes. If i want to know the profit on each home, i would use job costing. Perhaps i sell large complex software installations ( and i did). Using job cost accounting will show us exactly what are profit or loss was on a job so we could make adjustments to our bids. Does this help
2. Job costing system is applied where the manufacturing or service activity depends on the customers requirements, such as construction contracts, garage repair shop, tailor shop, etc. In each job the requirement is different. The activity will not commence until an order is received from a customer. Selling toys and games usually does not depend on the customer demand. These are produced and sold to any one who needs them. For instance, Barbie dolls are produced in the expectation that the children will buy them. Also board games like Monopoly, Snakes and Ladder, Chess, etc do not need special orders. The costing system in such cases will be process costing or product costing. However, job cost system can be used only, and only, if the customer wants the product according to his requirement. For instance, a chess lover may want the chess board made of marble and its pieces from ivory. Since this product is meant only for a specific customer, it will be produced only for that customer. Again, take the example of a famous garment manufacturer who produces and sells garments without waiting for customer orders. Suppose a famous departmental store wants garments made from a specific fabric with a specific design and with the supermarket label on each garment. This case will use job cost system.