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Managerial Accounting and Costing Systems

The primary feature associated with the job order costing system is that each job has its own unique qualities.
             Process Cost Systems.
             Process costing is a costing system that gathers manufacture costs for each process individually. This particular system is appropriate for companies whose product manufacturing process includes various departments and the cost flows from one department into another. This is a highly beneficial costing system to companies that manufacture products in a high volume, like computer companies or automobile manufacturers. Based upon the definition of these two costing systems it is apparent that the job order system is not one that companies that produce in larger quantities would find to be beneficial. This system would not be beneficial because the focus would not be on specific orders or the company's inventory. The process cost system can be designated for certain processes that happen during a specified time period.
             System Differences.
             Despite having certain similarities, both of these systems also have several differences. The job order costing system can only work with one account at a time, it involves the comprehensive gathering costs associated with production of a specific unit, while process costing is the collection of costs associated with long term production of products that lack any type of uniqueness. Based on the definitions and description of these two costing systems we can reasonable list the differences between the two methodologies as follows:.
             Product.
             Job-order costing is used in regards to a unique or specially ordered product, while process costing is more for products that are standard.
             Job Size.
             Job order costing is for producing products on a small scale. Process costing is for large productions.
             Record keeping. Job order costing requires considerably more detail in regards to record keeping, primarily because the time and material associated with each individual job.


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