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. |
Where 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 |
Costs 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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