Question

Explain process operations and the way they differ from job order operations.

Answer 1

Process operation :

process manufacturing operation is the mass production of products in a sequence of steps.

How do process operations differ from job order operations?

Both manufacturers and service companies can use job order and process production systems. The overall objective of process cost accounting is to determine the total cost per unit of a product; whereas, the objective of job order cost accounting is to determine the total cost per job. The focus in job order costing systems is on the individual job or batch. The focus in processing costing systems is on the process itself and on the standardized units produced. The features of job order manufacturing systems include custom orders heterogeneous products, low production volume, high product flexibility, and low to medium standardization. The features of process production systems include repetitive production, homogeneous products, high production volume, low product flexibility, and high standardization.