Which one of the following is a difference between a job-order cost and a process cost system?
A)The manufacturing cost elements are different.
B)Costs are totalled at different points in the manufacturing process.
C)The costs flow through the accounts differently.
D)Three primary costs make up the costs of products in a job-order system, while only two costs are used in process costing.

Question

Quizplus · Accepted Answer

In a job-order cost system, costs are accumulated for each individual job, while in a process cost system, costs are accumulated for each manufacturing process or department. Therefore, costs are totalled at different points in the manufacturing process. The manufacturing cost elements and the way costs flow through the accounts may be different, but these are not the primary differences between the two systems. Option D is incorrect as both job-order and process costing have three primary costs (direct materials, direct labor, and manufacturing overhead) that make up the costs of products.

Which One of the Following Is a Difference Between a Job-Order