Which of the following describes the differences between job-order and process costing?
A)Job-order costing is used in financial accounting, while process costing is used in managerial accounting.
B)Job-order costing can only be used by manufacturers; only service enterprises use process costing.
C)Job-order costing is voluntary, while process costing is required by GAAP.
D)Job-order costing traces costs to jobs, while process costing traces costs to departments and averages the costs among the units worked on during the period.

Question

Quizplus · Accepted Answer

Job-order costing is used when products or services are unique and produced in limited quantities, while process costing is used when products or services are homogeneous and produced in large quantities. Job-order costing traces costs to individual jobs or projects, while process costing traces costs to departments or processes and averages the costs among the units worked on during the period.

Which of the Following Describes the Differences Between Job-Order and Process