The Main Difference Between Job Order and Process Costing Systems

question 92

Multiple Choice

The main difference between job order and process costing systems is that

• A) one accumulates costs by materials issued and the other by labor incurred.
• B) one accumulates costs by individual jobs and the other by particular processes.
• C) one emphasizes costs accumulated in completed products and the other emphasizes costs associated with work-in-process.
• D) one emphasizes costs adding value to the product and the other emphasizes costs incurred because of waste, scrap, and obsolescence.

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Definitions:

OCI

Other Comprehensive Income, which includes revenues, expenses, gains, and losses that are not included in net income and directly affect shareholders' equity.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all items available for sale during the period.

Cost of Goods Sold

Cost of Goods Sold (COGS) is the direct cost attributable to the production of the goods sold by a company, including materials and labor costs.

Inventory Costing

A method used in accounting to value inventory, incorporating elements like purchase cost, conversion costs, and overheads to determine the end value of inventory.