Accounting · blog · business · Job Costing · Process Costing

Job Costing and Process Costing

Job costing and process costing are very similar in what they do. Both systems record the costs involved in the making of products. however a specific job like making a chair in a furniture store would compile a list of cost using job costing. All the costs involved making the chair including all screws paint and materials used to make the chair will be listed in the job costing. Process costing provides detailed information for management and helps determine if the product is financially successful or not. The process costing system is used for larger jobs and account items over the entire time it took to fulfill the job. For example, the process of making gasoline will take a longer period of time and requires materials to be used during the entire time for the large amount. Materials needed to make the gasoline will be compiled on the process costing list.

Disadvantages for job costing is that the detailed information provided for job costing records are down to the details for the specific job. This record keeping is very time consuming. Process costing is simplified and less time consuming compared to job costing. The process costing is more suited for keeping track of departments or groups rather than detailed information on single products.

Competitive pricing will always be a concern. In my view and understanding, the customer is the most important part of a business. A happy customer will return and be a repeat customer. If a product is overpriced the business may lose the customer, so pricing the product close to what the market suggest the product should be priced is imperative. Comparable prices with some sort of extra value can help the business thrive with a unique way to present the product.

Steven Bragg. (2013, March 31). Accounting Tools. In What is the difference between job costing and process costing? Retrieved from

David Ingram. (2014). Demand Media, Chron. In Advantages and Disadvantages Job Order Costing & Process Costing. Retrieved from

Laurel Delaney. (2014). About Money. In How to Price Your Product Competitively For Import and Export Markets. Retrieved from

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