Question

What are the major differences between job-order costing and process costing systems? Give an example of a well-known company that might use job-order costing and an example of a well-known company that might use process costing. Explain why you have chosen the companies that you did, specifically why job order costing or process costing are used. Do not choose companies that your classmates have already commented upon. Participate in follow-up discussion by critiquing your classmates' choices of companies.What are the major differences between job-order costing and process costing systems? Give an example of a well-known company that might use job-order costing and an example of a well-known company that might use process costing. Explain why you have chosen the companies that you did, specifically why job order costing or process costing are used.

Answer 1

The difference between Job Order Costing and Process Costing System are stated below and the company that adopted job Order Costing and Process Costing are also given below.

Basis of Difference	Job Costing	Process Costing
Meaning	Job Costing involves records of total production cost attributable to specific units or group of units.	Process costing is required for lengthy production processes. It involves cost that cannot be distingiuished from each other.
Use	Job Costing applies to small production units.	Production Costing applies to large organization.
Keeping Of Records	More record keeping is required in Job Costing as the time and materials are charged to specific jobs.	Relatively less record keeping is required as aggregate costs are charged.
Example	Aircraft Manufacturing Companies.	Industries such as coal, petroleum, coal mining, chemicals etc use Process Costing.

Well known Company that adopted Process Costing Chevron Corporation (Petroleium Products

Well known Company that adopted Job Order Costing - Boeing (Manufactures Planes)