Difference between job costing and process costing

Following is the difference between job costing and process costing , below table is meant to make the difference between the two costing systems more clear.


Job Costing Process costing
1 Application Where different products having peculiar specifica­tions
are produced against customers’ orders.
single standard product is produced or two or more standard products are produced in successive runs.,Production
is for stock and in anticipation of demand.
2 Accumulation of Cost In
order to determine cost of each job, costs are compiled jobwise. At the same
time, to evaluate efficiency of departmental management cost are also compiled department wise
arc associated only with,departments
3 Calculation of unit cost Unit cost is computed on
completion of job. The job may itself be a single cost unit e.g. a machine or
it may be a multi unit batch.
An average unit cost is computed at the end of
costing period by dividing total cost by units of output of the period.
4 Basic costing document Job Cost Sheet is regarded as the basic document. Process cost sheet also called cost of production
report is the key document.
5 Work in Process Control account Only one work in process
control account is maintained
A separate work in process
control account is maintained for each producing department.
6 Cost of operating the system More clerical efforts are needed to accumulate
costs by jobs and by departments,,therefore, the system is
more expensive.
Cost accumulation is simple as costs are
accumulated only by departments;,therefore, the system is
comparatively less expensive.

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