ECONOMICS

Detailed explanation-1: -The flow of costs through the manufacturing accounts is essentially the same in both process costing and job-order costing. Companies that use a process-cost accounting system would establish a separate Work-in-Process Inventory account for each manufacturing department.

Detailed explanation-2: -In a job costing system, the cost is tracked from raw materials to finished goods with costs such as direct labor, machine hours, and manufacturing overhead assigned to the job via a job cost tracking sheet. The costs are then utilized to assign a selling price for the item manufactured.

Detailed explanation-3: -The process of the flow of costs begins with valuing the raw materials used in manufacturing. The flow of costs then moves to the work-in-process inventory. The cost of the machinery and labor involved in production are added as well as any overhead costs.

Detailed explanation-4: -Both process costing and job-order costing assign production costs to units of output.

Detailed explanation-5: -The difference between job costing and process costing is that job costing is used for custom products, and process costing is used for mass-produced items that are the same or similar. Job costing tracks all direct and indirect costs for each item or project.