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    Similarities and Differences in Job Costing and Process Costing

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    Explain the similarities and differences between job order costing and process costing. In your explanation, provide examples of when job order costing and process costing would be most appropriate.

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    Solution Preview

    There are two types of costing methods: job costing and process costing. In general, job costing is the method to determine the accumulation of the production costs for a business unit or a group of business units. In the job costing method, the labor cost, parts used in the production of an item and other materials are charged to the cost of producing a unit. For example, a manufacturing company that produces tables can use job costing. The cost related to the production of one table is noted on a time sheet and compiled on the cost sheet for this table job. Also, the wood and labor used to create the table is included in the cost of the table. The job costing cost can be directly ...

    Solution Summary

    There are two costing methods that can be used in manufacturing and production companies. The two methods are job costing and process costing. Based on the company, there is a costing method that works the best.