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JOB COSTING AND PROCESS COSTING 1

Job Costing and Process Costings

Name

Institution

JOB COSTING AND PROCESS COSTING 2

Job costing and processing costing are similar in several ways. Both systems are used for

the same purpose. The purpose of job costing and processing costing is to assess the cost of

products. Both systems record the costs in the same way. The cost is recorded in separate accounts

and later transferred to the main ledger account (Drobyazko, 2019). Lastly, both job costing and

process costing use pre-established rates per overhead to get overhead. On the other hand, job

costing is different from processing costing. Job costing involves accumulating the cost of a more

specific product within production. A good example of cost production is the cost of making an

aluminum foil. Processing cost involves determining the cost for a broad production of

homogeneous products. Job costing is used when dealing with specific products, while process

costing is applied when dealing with standardized products. There is more bookkeeping in job

costing than in process costing.

The system which best suits my products is job costing. I preferred job costing to process

costing because it was suitable for determining the profit to be made for a specific product and

crucial in pricing. The other reason why I selected job costing is because aluminum foil is a specific

product. When managers adopt job costing may benefit from assessing the cost of making the

product (Bottomley, 2018). It also helps managers understand the exact amount of money required

for production, such as cost for materials, labor costs, and even overhead. Job costing is important

in making a decision. Decisions about pricing and profit are made in relation to the expenses used

in the production of the product. Job costing is important in the making assessing the cost. The

direct costs involved in my product are buying materials such as aluminum alloy. It also consists

of the cost of labor and even overhead. Labor cost is tied to all employees; it is calculated by

multiplying the payrolls by the duration of time needed to complete the job. The cost of material

is tied to all the necessary materials. It is measured by measuring the cost of materials used. A

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JOB COSTING AND PROCESS COSTING 1 Job Costing and Process Costings Name Institution JOB COSTING AND PROCESS COSTING 2 Job costing and processing costing are similar in several ways. Both systems are used for the same purpose. The purpose of job costing and processing costing is to assess the cost of products. Both systems record the costs in the same way. The cost is recorded in separate accounts and later transferred to the main ledger account (Drobyazko, 2019). Lastly, both job costing and process costing use pre-established rates per overhead to get overhead. On the other hand, job costing is different from processing costing. Job costing involves accumulating the cost of a more specific product within production. A good example of cost production is the cost of making an aluminum foil. Processing cost involves determining the cost for a broad production of homogeneous products. Job costing is used when dealing with specific products, while process costing is applied when dealing with standardized products. There is more bookkeeping in job costing than in process costing. The system which best suits my products is job costing. I preferred job costing to process costing bec ...
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