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| Process costing | to distinguish between job order and process costings to examine Process costing |
| Process costing | To learn how to compute equivalent units & prepare a cost of production report |
| Job order | accounted for work done job by job. A job consisted of a single unit or a batch of identical units. Job cost sheets allowed for the accounting of jobs on an individual basis. Upon completion of a job, you could tell how much the job cost by adding up the costs on its job cost sheet. (cost objective=job) |
| Process Costing | is used to account for the production of "live" goods, usually manufactured in a continuos process (assembly line). Goods pass through diferent depts., so costs are accounted for dept. by dept. (chairs, automobiles, sugar) Periodically, costs of goods produced is estimated (monthly0 (cost objectiove=dept.). A cost of production report is prepared to determine the cost of production. You need to know how to calculate equivalent units (EQUs) in order to prepare this report. |
| Process Costing | Goods pass through diferent depts., so costs are accounted for dept. by dept. (chairs, automobiles, sugar |
| Process Costing | Periodically, costs of goods produced is estimated (monthly0 (cost objectiove=dept.). A cost of production report is prepared to determine the cost of production. You need to know how to calculate equivalent units (EQUs) in order to prepare this report. |
| Equivalent units | Expresses work done this period in terms of wholeness (whole units) |
| Equivalent units | Expresses "wholeness" |
| Equivalent units | Anything 100% complete is already whole, therefore, it would be equal to an equivalent unit) |
| Job Order | Account for costs job by job |
| Account for costs job by job-How? | Use a separate job cost sheet for each job |
| Time | You'll know how much of a job costs when the job is finished by adding up the costs on the job cost sheet. |
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