Question

Explain Job costing and process costing are two extremes of the continuum of conventional product costing system

Answer 1

Sl.No	BASIS OF DIFFERENCE	JOB COSTING	PROCESS COSTING
1	Production	Production is against specific order or demand of the customer	Production is in continues flow as the products are homogeneous in nature
2	Dependence	Each job is separate and independent of others	Product loss their individual identity as they are manufactured in a continues flow
3	Transfer	No transfer is made from one job to other unless there is a surplus work or excess production	The cost along with the out put are transferred from on process to another to another as the process move likewise
4	Cost determination	Cost are determined for each job separately irrespective of the time period	Costs are complied for each process on time basis , ie production of a given time period
5	Work in progress	There is handily any work in progress at the beginning of the period or end of the time accounting period	There is the existence of work in progress at the beginning as well as at the end of the accounting period
6	Control	Each product is different and production is not continues , proper control is comparatively difficult.	As the production is scandalized and stable , proper control is comparatively easier
7	Suitability	It is suitable where the goods are produced to customer order that can be identified in the value of production and the production is not continues	It is suitable where the goods are made for stock and production is continues
8	Cost Unit	Each job is taken as cost unit	Each unit is taken as cost unit
9	Cost accumulation	Cost are collected and accumulated against each job	Cost are allocated for each process
10	Cost ascertainment	Cost of a job is calculated when the job is completed	cost are calculated at the end of accounting period