Job Costing System and Process Costing System

Running head: JOB COSTING SYSTEM AND PROCESS COSTING SYSTEM
Job Costing System and Process Costing System
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1JOB COSTING SYSTEM AND PROCESS COSTING SYSTEM
Discussion on job costing system and process costing system:
It is vital for organizations to select proper kind of costing system for their industry and
product type (Blocher et al., 2016). The active system of job costing is utilized by organizations that
develop different situations and products. On the other hand, process costing has included cost
accumulation for long-term productions.
Job costing:
Job costing demotes the essential and in-depth accumulation of different cost of productions.
These are attributable to particular groups or units. For instance, in this case, the construction of the
custom-designed furniture piece is a good example. This is accounted for job costing system. In this
case, different labor costs working on specific items of furniture are recorded over time sheet. Then
it is compiled over a cost sheet illustrating that specific job. In the same way, wood and other parts
in furniture construction are included and is linked to that specific piece of furniture.
Moreover, the data is used for billing customers for materials usage and different activities to
be done. This is to track the extent of profits of companies on various production jobs. These are
associated with particular items of that furniture (Hitomi, 2017).
Lockheed Martin:
To understand the case, Lockheed Martin, engaged in advanced technology systems can be
taken as a good example. There are specific characteristics of every system. Regarding product
uniqueness, this technology is utilized for unique products. As far as the overall size of the job is
considered, it is being used for various small runs of productions. Here, much more record keeping
is needed for job costing (Kavanagh & Johnson, 2017).