Explain the differences between
Explanation of Solution
Job order costing: Job order costing is one of the methods of cost accounting under which cost is collected and gathered for each job, work order, or project separately. It is a system by which a factory maintains a separate record of each particular quantity of product that passes through the factory. Job order costing is used when the products produced are significantly different from each other.
Process Costing: Process costing is method of cost accounting in which all the costs that are incurred production process are recorded. Output of one process becomes input for next process. This method is used to apply cot to similar products that are mass-produced in uninterrupted manner.
Job-costing system is different from the process costing.
The costs are allocated to a separate units, batch, or lot of a product or service under job order costing system. In process costing, the cost of a product or service is calculated by using the broad averages and allocates the cost to the same or alike units.
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Managerial Accounting
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