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Difference between job order costing and Process costing.


We can understand the difference of job order costing and process costing from their definitions. However we can differentiate them in effective way by following way :

    Difference Between Job order costing and Process costing
Job order costing
Process costing
It Involves custom orders according to the demand.
Products are large in volume irrelevant to the order.
Few products manufactured in job order different from each other costing based on the order.
In this many products are manufactured which are similar to each other.
Product flexibility is high because of heterogeneous products.
Product flexibility is low because of similar products.
In job order costing standardization is low or medium not high.
In process costing standardization is high as compared with job order costing.
Production level is lower because of order based production of heterogeneous items.
Production level is higher because of repetition of production process of similar items.
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