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 these companies, and do not choose companies that your classmates have already addressed in a post.

Answer 1

Major Differences between

Job Order Costing	Process Costing System
This costing system is used when products produced are not identical with each other	Process Costing is used when products produced are Identical with each other.
Job costing system is a system of allocating manufacturing cost on a product or a batch of product or a lot of product.	Process costing is also a method of allocating manufacturing cost but on the Total Units Produced in a particular period say a month or quarter or year.

Example of Company that might use Job Order Costing is Flour Corp.

Example of Company that might use Process Costing System is Coco cola.

Reason to Chose Flour Corp as a company that might use Job Order Costing is because Flour Corp is a construction Company and every project of this company has different value. Manufacturing overheads are allocated on the basis of work done on a particular project.

Reason to chose Coco cola as a company that might use Process Costing System is because Coco cola is a company that produces its product that are identical in nature and cost is charged on number of products produced.