ECONOMICS

Detailed explanation-1: -Job order costing is a costing method which is used to determine the cost of manufacturing each product. This costing method is usually adopted when the manufacturer produces a variety of products which are different from one another and needs to calculate the cost for doing an individual job.

Detailed explanation-2: -So, we can conclude that the standard cost system is used in job order costing. And it is not applicable in process costing. Process costing is the method for calculating the cost of production as per the processes, individual costs cannot be estimated in process costing.

Detailed explanation-3: -Thus, a job order cost system is used for custom jobs when it is easy to determine the cost of materials and labor used for each job. A process cost system is often less expensive to maintain and works best when items are identical and it is difficult to trace the exact cost of materials and labor to the final product.

Detailed explanation-4: -Process costing is a form of operations costing which is used where standardized homogeneous goods are produced. This costing method is used in industries like chemicals, textiles, steel, rubber, sugar, shoes, petrol etc. Process costing is also used in the assembly type of industries also.