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The topic: (In Chapters 1 to 3 you were introduced to Managerial Accounting Concepts and how they can be applied in job order costing or process costing. In chapter 4 you focus on alternative methods of assigning the overhead costs regardless of whether it is job order costing or process costing. You are to think of a business that you know either as an employee or consumer. Should they use process costing or job order costing and which method of overhead allocation would best serve this business. )

The post:

Last year I worked at David's Bridal in NYC. David's Bridal should use process costing because the nature of the business is such that each dress is ordered from the store and then customized (altered) afterwards. For example, 3 women who order the same dress in a size 6 will receive the same exact dress, and then afterwards they can go to the alterations department to do things like make the dress shorter or sew on a belt. Because they initially receive the same exact dress as one another, process costing is most effective. For overhead allocation, David's Bridal should use the departmental overhead rate method. This would work better than a plantwide method because, for example, wedding dresses take more labor hours and more materials to make than bridesmaids dresses, so they should have different overhead rates applied to one another.