Both have same elementary functionalities to assign material, work and operating costs to items and to provide means for computing unit item cost.
Both use similar elementary processing accountants, including manufacturing costs, raw materials, work in process and processed goods.
The flow of costs through the processing accounts is mainly similar in both systems.
Differences:
The flow of components in a process costing system is somewhat constant. However, these components are indistinguishable from one another. Identifying materials under process costing is a senseless affair, and operating expenses with a certain order from a client, since each order is simply one of several that are filled from a constant stream of virtually identical units from the production line. Cost is organized by department and not order for process costing, while assign same costs evenly to all compartments that pass through the department during a stage. Additional difference is that job cost sheet in never applied in process costing, since the central point of process costing is at departmental levels. Using job cost slip requires for a manufacturing report is organized for each section in which work is done on items. The production statement serves various functions. It presents a summary of several compartments moving through a department during a stage, and it also presents a calculation of unit costs. It also shows charged costs to the department and dispositions charged.
Costing process permits for a more complicated method. Whereas job order costing is plainly appropriate for organizations endowing items or services that are processed in restricted volumes according to client demands and standards. In difference, process costing permits for the accumulation and assign of prices to the items in manufacture. This costing would be appropriate for my client.
Another aspect to bear in mind is that a job price sheet is not required for fabrication costing, since its core functions are aimed at the departments. This is to say, manufacturing report is used. It is a summary of number of items moving through a department in occasions, and accommodates a calculation of unit prices. In addition, this report can indicate what prices were exhausted by the department and what disposition was attained on these costs.
References:
Andrew Wileman (2008) Driving Down Cost: How to Manage and Cut Costs--Intelligently, …