11.5. Job Costing System vs Process Costing System

Table 11-1. Comparison of job costing system and process costing system

job costingprocess costing
Many different jobs are worked on during the same period, with each job having different production characteristics.A single product is produced either on continuous basis or for long periods. All products are identical or at least similar.
Costs are accumulated by individual job.Costs are accumulated by departments.
Job cost sheet is utilized to accumulate costs by a job.Department production report is utilized which shows the accumulation and disposition of costs.
Unit costs are derived by job on the job cost sheet.Unit costs are derived by department on the department production report.

Screen Work Order [M8P3] records the ouputs of manufacturing, construction, or service. Every record of ouput generates costing journal entries.

The comparisons in above table is difficult to understand and distinguish. They belong to academia and require substantial imagination. Their concepts are confusing and often contradict each other in real life.

PostERP's time-based costing system completely removes the concept of job costing and process costing. It does not require its users to configure those abstract parameters for each item prior to costing calculation. It just indiscriminately and accurately calculates and records item costs. For example, product X is composed of items A and B:

The key and the only one rule to follow when working with PostERP's time-based costing system in order to guarantee accurate costing data is this:

Promptly enter with absolute integrity the transaction data that strictly reflects each transaction's occurring time point.

Make sure that the data associated with workstation w1 was entered before the end of last month. Do not procrastinate, for example, until tomorrow.

PostERP simultanoiously handles both job costing system and process costing system, and the mixture of the two.