What are the different costing methods and how do they compare?

What are the different costing methods and how do they compare?

There are several costing methods, including job costing, process costing, and activity-based costing. Each has its own advantages and is suited for different types of businesses.

Can you explain job costing in more detail?

Job costing tracks costs for specific jobs or projects, making it ideal for custom work. It helps in determining profitability for each job.

What about process costing?

Process costing is used for mass production where costs are averaged over units produced. It's useful for industries like manufacturing.

How does activity-based costing differ from these methods?

Activity-based costing allocates overhead costs based on activities that drive costs, providing more accurate product costing.

Which method is the most accurate?

Activity-based costing is often considered the most accurate as it reflects the true costs associated with specific activities.