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Describe the Differences Between Process Costing and Job-Order Costing

question 176

Essay

Describe the differences between process costing and job-order costing.


Definitions:

Direct Materials

Basic substances that can be directly linked to the production process of a product.

Direct Labor Costs

The expenses associated with the wages of employees who are directly involved in the production or manufacturing of goods or services.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders based on a projected activity level.

General Ledger

The main accounting record of a company that uses double-entry bookkeeping, containing all the financial accounts and statements.

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