Process costing

Question 1

Job-order Costing

Answer 1

A costing system used in situations where many different products, jobs or services are produced each period.

Question 2

Process Costing

Answer 2

A costing method used in situations where essentially homogeneous products are produced on a continuous basis.

Question 3

Similarities between job-order and process costing

Answer 3

Both methods assign material, labour and overhead and overhead cost to products and to provide a mechanism for computing unit costs.

Both systems maintain and use the same basic manufacturing accounts, including: Manufacturing overhead, Raw materials, Work in progress and finished goods.

The flow of cost through both is almost the same

Question 4

Difference between job-order and process costing

Answer 4

The flow of units in a process costing systems is more or less continuous and these units are indistinguishable from one another.
A job cost sheet has no use in process costing, since the focal point of that method is on departments