Both job order and process costing systems use averaging to compute unit product costs

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Both job order and process costing systems use averaging to compute unit product costs, but they differ in their approach to accumulating costs to produce a unit of product. Job-order costing is used for unique or custom-made products, while process costing is used for the production of homogeneous goods in a continuous fashion. In job-order costing, costs are accumulated by job, whereas in process costing, costs are accumulated by process or department.

Both Job Order and Process Costing Systems Use Averaging to Compute