The upcoming discussion will update you about the differences between job costing and process costing.

Difference # Job Costing:

1. Job costing is concerned with the cost of an individual job or batch regardless of the time taken to produce it.

2. A job is carried out or a product is produced to meet the specific requirements of the order. Job costing may be related to single unit or a batch of similar units.

3. Standardization of controls is comparatively difficult as each job differs and more detailed supervision and control is necessary.


4. Costs are collected to each job at the end of its completion.

5. Only prime cost elements are traceable and the overheads are apportioned to each job on some appropriate basis and sometimes it is difficult to select a suitable method of absorption of overheads to individual jobs.

6. Work-in-progress may or may not exist at the end of accounting period.

7. The costs of each job is ascertained by adding materials, labour and overheads.


8. Job costing is a specific order costing.

Difference # Process Costing:

1. Process costing is impossible to identify individual jobs and costs are calculated on time basis for all units of output in that time.

2. All the products are identical and there is a continuous flow of production. Process costing is applied to a large number of units.

3. Proper control is relatively easy as there are standards applied for costs, process loss, time of production, etc.


4. Costs are accumulated and collected for each process at the end of specified accounting period and transferred to next process/ department till the last process is completed.

5. Process costing system is easier to operate than Job Costing system because the detailed work of allocating costs to many individual jobs is unnecessary. Many of the costs that are indirect in a Job Costing system may be regarded as direct in Process Costing system.

6. Normally, there will be opening and closing work-in-progress for the accounting period.

7. The unit cost is the average cost of the process for a given period.


8. Process costing is used to ascertain the cost of a product at each process or stage of manufacture.