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Job and Process Costing

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Distinguish between job costing and process costing. Describe the difficulties associated with each type. What can companies do in order to price products competitively and avoid some of these difficulties?

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Solution Summary

Your discussion is 423 words and gives examples of both process and job costing and discusses difficulties with the methods. Two suggestions are made to avoid the troubles.

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Distinguish between job costing and process costing.
Job costing assigns materials, labor and overhead to individual jobs so each job has a unique set of costs based on the resources consumed by it. For instance, movies each have unique actors, sets, scenary and so forth. Each movie would be a separate job and the costs would be tracked by movie. Each costume and labor hour would be charged to the particular job.

Process costing co-mingles all the units, presuming that are all identical. The total costs for the month are spread across the units produced during the month and the cost per unit is the same for all that month's production. This would make sense for coca-cola ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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