Job-order costing is used to calculate the cost of producing a unique or custom-made product, whereas process costing is used for the production of standardized products. Job-order costing assigns costs to each job, while process costing assigns costs to each process or department. Job-order costing uses job cost sheets to accumulate costs for each job, while process costing uses departmental production reports to accumulate costs for each process. Job-order costing can have high variation in production costs per unit, while process costing typically results in more stable production costs per unit. Job-order costing is more suitable for small production runs, while process costing is more suitable for large-scale production. Job-order costing requires a higher level of record-keeping and tracking of costs for each job, while process costing requires tracking of costs for each department or process.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
- Job-order costing is used to calculate the cost of producing a unique or custom-made product, whereas
process costing is used for the production of standardized products. - Job-order costing assigns costs to each job, while process costing assigns costs to each process or department.
- Job-order costing uses
job cost sheets to accumulate costs for each job, while process costing uses departmental production reports to accumulate costs for each process. - Job-order costing can have high variation in production costs per unit, while process costing typically results in more stable production costs per unit.
- Job-order costing is more suitable for small production runs, while process costing is more suitable for large-scale production.
- Job-order costing requires a higher level of record-keeping and tracking of costs for each job, while process costing requires tracking of costs for each department or process.
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