Question

why the accounting requirements for job order costing is more demanding than those for process costing? Explain by taking any manufacturing firm as example. Also by using some examples of service firms that might use job-order costing, explain why they use it

Answer 1

Job-order costing accumulates costs by jobs, and process costing accumulates costs by processes. Job-order costing is suitable for operations that produce custom-made products that receive different doses of manufacturing costs. Process costing, on the other hand, is suitable for operations that produce homogeneous products that receive equal doses of manufacturing costs in each process.

More paperwork is required in a job-order system. Labor and materials are assigned to departments in a process-costing system. In a job-order system, labor and materials must be tracked to each job, requiring time tickets and more use of materials requisitions. Additionally, a job-order system requires a separate job sheet for each job