1,750–2,000 words: Cost Behavior Patterns and Concepts

EEC has introduced a new 1.5 gigabyte (GB) computer memory chip.

• Should EEC use a job-order costing system, which is a costing system where costs are collected and assigned to units of production for each individual job, or a process costing system, which is a costing system that accumulates production costs by process or department for a given period of time, to report the costs of this new product? 
  • How are the systems different? 
• Describe how the selected system would work to track the costs of the product.
• Identify the cost driver, and explain the process of tracking the costs.
• Provide examples of products that EEC might offer for which a job-order costing system would be appropriate.
• Provide examples of products that EEC might offer for which a process costing system would be appropriate.