What is the difference between Job Costing and Process Costing? - ProProfs Discuss
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What is the difference between Job Costing and Process Costing?

Asked by B. Wright, Last updated: Oct 10, 2024

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3 Answers

M. Klose

M. Klose

M. Klose
M. Klose, Content Writer, Oakland

Answered Oct 11, 2020

Job costing refers to the costs that are enacted in the manufacturing business. Job costing ledgers, where such costs are recorded, form a crucial part of the manufacturers' final account statement. This type of costing involves recording the expenses as per the specific jobs rather than a particular process.

Process costing refers to the approach involved in calculating the costs which are determined while engaging in a specific task or job. Job costing entails the costs of each unit of production. It involves the expenses that are accumulated for each production unit. Process costing works effectively for the industries that are seen to produce a single type of product.

It helps to keep a firm grip over the monthly expenditures in a manufacturing business. Both of these terms indicate the costs pertaining to labor, material, and overhead costs. At the conclusion of the day, it is the documentation that is key. With job costing, the job cost sheet is imperative. In process costing, a document having disposition and accumulation of various costs is significant.

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H. Jones

H. Jones

H. Jones
H. Jones, Web Content Writer, San Antonio,

Answered Sep 15, 2020

Job costing refers to the costs that are encountered in the business related to manufacturing goods. On the other hand, process costing refers to the methodology involved in calculating the c-costs that are incurred while performing a particular task.

A job cost involves every individual unit of production while the processing unit involves the costs are averaged for each cost of production. Job costing can be carried out while a particular job is going on, while a process costing can be achieved only when all the processes are completed.

The document needed to carry out job costing are much different from those needed for process costing. In their utilization, job costing is typically used by industries that manufacture customized and heterogenous products, while process costing is used by industries that are involved in the mass production of homogenous products.

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Elena Sheldon

Elena Sheldon

Being in the arts and science department amuses me every day.

Elena Sheldon
Elena Sheldon, Director of research, Diploma in Arts and Science, Berkeley, California

Answered May 12, 2020

Job costing and process costing are known to have some similarities with each other, but they have some differences that you should know. Job costing will talk about all of the accumulated costs that are available. They can be for some units, or it can also be for groups of units that are available.

Process costing, on the other hand, will usually need the accumulation of costs for certain products that may be for an extended period of time. There are times when the products that would need to be under process costing are not really connected or related to each other, but since they are done under a certain period of time.

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