Which of the following is a difference between a job-order costing system and a process-costing system? a. A job-order costing system accumulates costs by department, while a process costing-system accumulates costs by job. b. A job-order costing system uses a single work-in-process account, while a process-costing system has a work-in-process account for every process. c. A job-order costing system is used only by manufacturing firms, while a process-costing system is used by both manufacturing firms and service firms. d. A job-order costing system uses cost-sheets for assigning labor costs, while a process-costing system uses time tickets for assigning labor costs to processes.

Question

Business

Superman

23 October, 12:52

Which of the following is a difference between a job-order costing system and a process-costing system? a. A job-order costing system accumulates costs by department, while a process costing-system accumulates costs by job. b. A job-order costing system uses a single work-in-process account, while a process-costing system has a work-in-process account for every process. c. A job-order costing system is used only by manufacturing firms, while a process-costing system is used by both manufacturing firms and service firms. d. A job-order costing system uses cost-sheets for assigning labor costs, while a process-costing system uses time tickets for assigning labor costs to processes.

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Jacquelyn Cross · Answer 1

b. A job-order costing system uses a single work-in-process account, while a process-costing system has a work-in-process account for every process.

Explanation:

In job order costing the cost statement is prepared for a single job, although it may include different processes but the cost is determined for this specific single job, cumulatively.

Whereas under the process costing system, the cost statement is prepared for each particular process.

Thereby this difference makes it obvious that there is one work in process under job order costing method and that there are as many work in process accounts as many processes in process costing system.