Differences Between Process Costing And Job Costing

Following are the main differences between process costing and job costing:

1. Applicability

Process costing is applied to ascertain the cost of standardized products produced in mass. So, naturally, materials, labor and other facilities remain indifferent. Job costing is applied to ascertain the cost of a specific order received. The quality and quantity of materials and labor and other facilities between jobs vary.

2. Cost Collection

Process costing accumulates manufacturing costs for departments or processes. Job costing uses cost sheet and accumulates manufacturing costs for each job or batch separately.

3. Time Period

Process costing has a time frame of certain months or years for which costs are accumulated. Job costing has no time frame. It ends after the completion of a particular job so that costs are accumulated for each job.

4. Unit Cost Ascertainment

Process costing divides total departmental process costs by the departmental process output to derive the unit cost. Job costing obtains unit cost by dividing the total cost of the job by the job order units.