Discuss three industries in which Job-order costing and Process costing can be used.

Expert Solution

Under job costing every job is taken as a separate job and hence separate job sheet is prepared for every job done. Job order socting is mostly done for those industries where requirement of each client /customer is different from other. Hence it is essential to separately prepare the cost sheet. Few examples of such industries are as follows:

1. Medical Services : Since requirement of every patients vary with each other, hence job order costing is required.

2. Financial Services: These services includes services like portfolio management, financial analysis etc. Since evry client have different requirement So, job costing is preferred.

3. Retail companies: Companies where different types of products sold required to use job order costing to track different sale of different products.

Process costing is mainly used where same type of process is used to create a product. Following are the example of industries using process costing :

1. Food processing industries: Since these industries follows a certain process to process the food as required.

2. Chemical Processing: It invloves some process to create a particular chemical . So, only a particular process can be followed.

3. Oil refining industries : To calculate gallons cost, these industries require a particular costing system.

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ekkarill92 answered 2 months ago

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