Job-order costing
The job-order costing method is used to assign direct costs to the specific order, contract, and also to a specific batch of production. Each job or order is specific and absorbs different operations which need costs both direct and overheads. Under this method, each job should be separated to ascertain the cost of each job. The job costing method is used in many specific works like printing, engineering, construction, etc.Some important types of Job- order costing are:
- Batch costing
- Contract costing
- Multiple costing
Process costing
Process costing is used in industries where a continuous process of production is carried out and the product is uniform. In other words, process costing is used in industries where certain steps are to be completed to convert raw materials into finished products. In this processing method, the cost of each process or step of production is determined for a given period of time. Process costing is used in many industries like sugar, chemicals, soap, oil, etc.Some of the important types of Process costing are:
- Single Costing
- Operation Costing
- Service Costing
I hope you
get to know about methods of costing which are Job-order and process costing.
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