Well the basic difference between job costing and process costing is that in job costing work is undertaken as an individual unit and manufactured according to customer’s specific requirement while in process costing is suitable for industries producing homogeneous products and where production is continuous.

Here are some more differences between job and process costing :-

Job costing is used in industries where production is carried on according to specific job order while process costing is used on continuous and mass production industries where products are similar and of same specifications.

1. In job costing the basis of cost allocation is work order meaning the cost of each unit in production is separately identified while in process costing the basis of cost allocation is on time basis meaning the total cost for production during the period is spread over units produced because separate identity of units is lost due to continuous production
2. In job costing there may well be work in progress at the end of accounting period while in process costing there is always work in progress both at the beginning and at the end of the accounting period.
3. In job costing one can calculate the costs and revenues after completion of the particular job or order while in process costing revenue and costs can be calculated only at the end of accounting period.
4. In job costing there is no transfer of work from one job to another job till there is surplus production or when the work is completed while in process costing costs of one procedure are transferred to costs of next procedure until the goods are entirely manufactured.

Hence it depends on the kind of work company is getting a company has to move towards either process or job costing.

You might be also be interested in reading  my previous articles on costing:

• Techniques of Costing

• Job Costing and Its Advantages

Related posts:

1. Techniques of Costing
2. Marginal Costing and Its Importance to the Management
3. Job Costing and Its Advantages