19 Jun 2022


Job and Process Costing

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Academic level: College

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Job Costing 

Job costing refers to a costing method used to determine the cost of particular jobs done with adherence to a client's specifications and needs. In a job costing system, costs are first accumulated, and then the accumulated costs are assigned to particular tasks, clients, contracts, or projects (Walther & Skousen, 2010). A job cost sheet is used as the supporting documentation in tracking the costs. The job cost sheets document the costs of direct labor, materials, and the company’s overhead expenses for a specific job.

The job costing method is used in the production of products such as clothing, repair shops, and healthcare facilities. The organizations or companies that are likely to use the job costing method are the companies that have readily identifiable costs of raw material. In addition, companies are also likely to use the job costing are the companies with identifiable labor in the production of each product, due to the variance of the products produced (Walther & Skousen, 2010). Companies that produce a variety of products are also likely to use job costing due to the need for the different manufacturing processes in producing each product.

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An example of a company that uses job costing is Cardiac Catheterization Laboratory. In this laboratory, the billing statement is produced upon the completion of a procedure. The statement contains a record of all the direct materials used in a specific procedure, such as stents, needles, and wires, as recorded in the job cost sheet. Direct labor records are the wages for the staff, while the overhead costs include the cost of the pulse oximeter, defibrillator, and electrocardiogram for a single procedure. The laboratory uses the job cost sheet records to determine the cost of that specific procedure.

Another company that uses the job costing system is CroppMetcalfe Services. This company offers services such as plumbing, air conditioning, repairs, and security. In billing for their services, the company uses job cost sheets to track the costs of material, labor, and overhead costs to determine the cost of doing a specific task.

Process Costing 

Process costing refers to a method of costing that tracks and accumulates all the direct and directs costs of a production process. The prices of producing products are assigned in a large patch. Companies that are likely to use process costing are the companies that produce few homogenous services or products (Dosch & Wilson, 2010). In this case, the products are produced through a repeated manufacturing process. Some of the companies that use process costing include companies that deal with the production of beverages, nails, iron sheets, and food. In this case, the costs of production are assigned to the batches of the products produced (Dosch & Wilson, 2010). The company streamlines the production process in such a way that each batch has similar production costs.

An example of a company that utilizes this method of costing is Ferguson Enterprises. This company is a producer and distributor of plumbing supplies. By specializing in one product, the company is able to utilize the process costing system to track the production costs of the product batches (Dosch & Wilson, 2010). Another company that utilizes a process costing system is American Hardwood Industries. Like, Ferguson Enterprises, this company specializes in producing a single product, the production of hardwood for flooring. The company's specialization enables it to operate under a process costing system since it can track the production costs in terms of products' batches.

Biblical integration: In the book of Luke 14: 28, the bible says, "for which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it” (English Standard Version, 2016). The implication of this verse is that in all tasks, there is a need for one to track the costs of completing the task. Hence, both process and job costing are important methods whose application relates to the biblical verse.


Dosch, J., & Wilson, J. (2010). Process costing and management accounting in today's business environment.  Strategic Finance 92 (2), 37-44.

English Standard Version (2016). The Holy Bible. Crossway Bibles .

Walther, L. M., & Skousen, C. J. (2010).  Job Costing . Bookboon.

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