Difference between Job Costing and Process Costing

Job Costing is a process of accumulation of production costs that is attributed to the different units of products or groups of units of products. For example if a customer orders for a customized set of furniture the set of furniture will be accounted under the job costing system. The cost of all the work done by the labor on that furniture item will be recorded on a time sheet and then recorded on the job sheet of that specific furniture manufacturing job. Similarly any kind of special wood or special piece that will be used in the production of that furniture will be accounted under job costing process. This information is combined and is used to bill the customer for that material and labor used to build that customized piece of furniture ordered by the customer.

Process costing involves the accumulation of the costs of long term production processes that result in manufacturing products that are indistinguishable from each other. For example the production of 1000 gallons of gasoline will require the use of oil for the entire process. The labor will be doing the same work uniformly and can be accumulated in the cost accounting. The total cost is calculated and then it is divided on the number of units produced to reach at the cost of per unit.

Thus the difference between the job costing and the process costing can be described in the bullet points as under:-

  • Uniqueness of the Products produced
  • Size of the job being done
  • Record Keeping of the job
  • Customer Billing Procedure


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