Job costing and Process costing difference
Distinction Between Job Costing and Process Costing Explanation Job Costing is ideal for businesses that produce customized products, where each job has different requirements and costs. For instance, a construction firm may use job costing to track expenses related to building a specific home, allowing detailed tracking of material and labor costs for that job alone. In contrast, Process Costing is suitable for industries where the production process is continuous, and the products are identical, such as in a beverage manufacturing plant. Here, costs are averaged over all units produced, making it easier to calculate the cost per unit, as all units are treated uniformly. Overall, the choice between job costing and process costing depends on the nature of the production process, with job costing focusing on individual jobs and process costing on continuous production.