2. JOB ORDER COSTING
Job order costing is a
costing method which is
used to determine the
cost of manufacturing
each product.
3. EXAMPLES OF JOB ORDER
COSTING
A company that designs
and produces custom-
made machines and/or
machine tooling. A
company that constructs
custom-designed
buildings. A company
that modifies trucks to
meet customers' special
needs.
4. PROCESS COSTING
A method of
costing used
mainly in
manufacturing
where units are
continuously mass-
produced through
one or more
processes.
5. 5 STEPS FOR PROCESS COSTING
Analyze
inventory flow.
Convert in-
process
inventory to
equivalent
units.
Compute all
applicable
costs.
Calculate the
cost per unit of
finished and
in-process
inventory.
Allocate costs
to units of
finished and
in-process
inventory.