Rebecca Meripo
Professor Lemonier
Westcliff university
12/7/17
Similarities between Job order manufacturing and process manufacturing costing systems
Both the job order manufacturing and process manufacturing costing have various similarities for example:
• Both the job costing and process costing have the primary purpose of allocating material to be used, labor force and overhead cost to products. They both also provide ways of computing the unit product cost.
• Both the two costing systems apply the use of essential accounting systems in manufacturing like in determining manufacturing overhead, raw materials, Work In Progress and finished goods.
• In both jobs costing and process costing, the flow of cost through the manufacturing accounts is the same.
Differences between Job order manufacturing and process manufacturing costing systems
• In job costing, the cost is always accumulated at the department level of the business firm. Therefore it is used to determine the …show more content…
Through the use of this system, the administration can find a better way of improving its business process because the system provides a method of allocating indirect cost depending on factors which creates the value. Since in this system cost is calculated per product, the management can determine which of the business processes are successful and the ones who need to be improved (Edmonds et al., 2016). The activity-based costing can also assist the administration in developing business processes through identifying non-valued added activities and allocating resources to profitable operations. It also provides useful information which can support the management in determining wasteful products and unnecessary costs to ensure the organizational funds are appropriately