Chapter 2, Problem 1Q

What is the difference between job order and process costing?

To determine

Concept introduction:

Job order costing:

Job order costing is applied to the businesses which manufactured the product or provide the services according to the client’s order. As its names suggest, Job order costing is donefor a particular job.

Process Costing System:

Process costing system is the branch of cost accounting which is applied where production of a product takes a range of processes tocomplete for example the production of shoes from leather goes through cutting, stitching and policing.

To indicate:

The difference between the job order costing and process costing.

Answer to Problem 1Q

The difference between the job order costing and Process costing is as follows:

Job order costing is applied to the businesses which manufactured the product or provide the services according to the client’s order. Process costing system is the branch of cost accounting which is applied where production of a product takesa range of processes to complete for example the production of shoes from leather goes through cutting, stitching and policing.

Explanation of Solution

Job order costing is applied to the businesses which manufactured the product or provide services according to order. As its names suggest, Job order costing is done for a particular job.

Process costing system is the branch of cost accounting which is applied where production of a product takes more than one processes to complete for example the production of shoes from leather goes through cutting, stitching and policing.