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In: Accounting

describe one company that would use job costing and one company that uses process costing. You...

describe one company that would use job costing and one company that uses process costing. You should include the name of the company the product/product type the company manufactures (or service it provides) and why you think they would use job or process costing.

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Expert Solution

Process Costing: It is a method of costing used in industries where the material has to pass through two or more processes

for being converted into a final product. It is defined as a method of cost accounting whereby costs are charged into processes and averaged over the units produced. A separate account is opened for each process is opened and all expenditure pertaining to that process is charged to that process account.

Examples: Such type of costing method is useful in manufacturing of Products like Steel , Paper, Medicines, Soaps, Chemicals , rubber, paints etc. where the process is continuous and the output of one process becomes the input of another process till completion

Job Costing: According to this method, costs are collected and accumulated according to jobs, contracts, or work orders.

Job costing is carried out for the purpose of ascertaining the cost of each job and takes into account the cost of materials, labour and overhead etc.

Examples: Printing, Furniture, Hardware, ship buiilding , interior decoration etc.

ekkarill92 answered 1 year ago
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