Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 5

Explain when companies are likely to use a job costing system or a process costing system. Provide examples.

Step 1 of 3

Job Costing:

Job costing refers to the accumulation of cost and then assigning the same to the product or service produced. Job costing is used when cost are directly traceable with respect to the specific product or customer project

Process Costing:

Process costing refers to the accumulating cost at the departmental level and than assigning the same to the product or service. Process costing is used where mass production of product or service is done.