Job-Order Costing vs. Process Costing

Both systems have the same basid purpose

to assign material, labor, and manufacturing overhead costs to products and to provide a mechanism for computing unit product costs.

Both systems use the same basic manufacturing accounts

Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods.

Job-order costing is used when a company produces many different jobs that have unique production requirements

Process costing is used when a company produces a continuous flow of units that are indistinguishable from one another.

Job-order costs are accumulated by individual job

Process costs are accumulated by department

Unit cost are computed by job on the job cost sheet

Unit costs are computed by deparment

The flow of costs through the manufacturing accounts

basically the same in both systems.