Difference Between Process Costing and Job Costing

A comparative study of process and job costing will help in understanding both systems in a better way.

Difference

Process Costing

Job Costing

1. Costs are calculated process-wise and per unit cost is the average cost ascertained by dividing the total cost of the process by the number of units produced. 1. Costs are separately calculated for each job, which is a cost unit.
2. Production of standardized and identical products is undertaken. 2. Production of non-standardized and unidentical items is undertaken in accordance with the instructions and specifications of the customers.
3. Costs are calculated at the end of a particular period. 3. Costs are ascertained on the completion of a job.
4. As there are series of processes employed, the cost of one process is transferred to the other process. 4. As the job as a whole is considered as a single unit, there is no of one part of job to another.
5. The nature of production is continuous, there is usually work-in-progress in the beginning as well
as at the end.
5. The work-in-progress may or may not occur in the beginning and at the end of the accounting period.
6. On account of continuous and un-interrupted production, cost control is comparatively easier. 6. Cost control becomes difficult due to the intermittent nature of production.
7. Production is taken to stores. 7. Production is undertaken against orders from the customers.

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