Explain the difference between job order costing and process costing.
Job ordering costing is a system where each company manufactures a unique and cost can be identified would be tracked separately. When this item’s moves through the company production, the costs of materials used are identified, with hours of production such as employees worked hrs. The project is determined and final costs will include the allocation of manufacturing and overhead.This type of calculation and summarized on the job cost. For example, a wedding cake, the order sheet allows the business management to determine whether the pricing for a simple cake vs an elaborate cake.Companies spent hundreds of dollars to make it run, offering different type and variety to ensure the business runs correctly. Overhead is calculated when pricing each job separately, each order is needs to be adjusted accordantly. In job costing the cost object is a unit or multiple units of a distinct product, creating what we called a job. The company goal is costing the job to determine the cost of product and finalizes the product. Finding out how much supplies cost and designed to cover those we might not measure exactly.
Explain the difference between job order costing and process costing. Identify the types of companies that are likely to use each of these costing processes, along with an example company for each. Provide a rationale for your response and selections.