Job vs. Process Costing Comparison

Subject: Case Studies
Pages: 1
Words: 310
Reading time:
2 min
Study level: College

Process costing system is frequently used in companies that produce similar products in batches, such as Wrigley Company and Pittsburgh Paints. Job costing systems are used in companies specializing in the production of unique products, such as Boeing Company and Lockheed Martin. The company in which I would like to work someday is PepsiCo. PepsiCo is a multinational company that specializes in manufacturing different beverages and snacks. Besides the initial Pepsi Cola, the company includes several other popular food and beverage brands, such as Frito-Lay, Cheetos, Aquafina, and Mountain Dew. According to Jallow’s study of PepsiCo’s strategy, the company has a good reputation, and its products are well known and loved, which allows the company to collect a revenue of 67 billion dollars yearly (2021). Even though the company is mostly known for beverage production, the food department accounts for 54% of the company’s revenue (Jallow, 2021). Apart from the company’s financial stability, I would like to work at PepsiCo someday because the company utilizes a strong vision statement that supports environmental protection.

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Reflecting on the learned materials about job and process costing, PepsiCo is more likely to use the process costing model. As the company specializes in the mass production of similar products, beverages, and snacks with different characteristics, such as flavor, the production of the company’s goods presents a continuous process with no separate jobs. Therefore, the company is more likely to use process costing with bulk unit measurements as it simplifies calculating the cost of products and allows tracking costs by each process. Moreover, the process costing system is widely used in the food industry which implies the simultaneous production of millions of packages in different locations. Thus, as PepsiCo also produces multiple products consumed more than one billion times a day in 200 countries, there is no doubt that the company uses the process costing system.

Reference

Jallow, A. (2021). A strategic case study on PepsiCo. SSRN. Web.