A major difference between process costing and job-order costing is
A)costs are calculated at each step in a job-order system while only calculated at the end of a process costing system.
B)costing of material components is more sensitive in a process costing system.
C)job-order costing is focused on each specific job while process costing focuses on departmental activity.
D)process costing uses only one work-in-progress account while job-order costing uses many work-in-progress accounts.

Question

Quizplus · Accepted Answer

Job-order costing tracks costs for each specific job or project, while process costing focuses on the costs for each department or process. In job-order costing, the costs are identified and accumulated by specific job or project, while in process costing, the costs are accumulated by process or department. Therefore, option C is the correct choice. Option A is incorrect as both systems calculate costs at each step. Option B is incorrect as costing of material components is equally important in both systems. Option D is incorrect as both systems utilize work-in-progress accounts, but the number of accounts used may vary depending on the complexity of the company's operations.

A Major Difference Between Process Costing and Job-Order Costing Is