A comparative study of process and job costing will help to understand both systems more effectively. A summary of their differences is given below.

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 according to customer instructions and specifications
3. Costs are calculated at the end of a particular period 3. Costs are ascertained on the completion of a job
4. As a series of processes is involved, the cost of one process is transferred onto the other process 4. As the job as a whole is regarded as a single unit, costs are job-specific
5. The nature of production is continuous, where 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 at the beginning or end of the accounting period
6. Due to continuous and uninterrupted production, cost control is comparatively easy 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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