BAR Cost Accounting · Updated November 2026
Job Order or Process Costing: Are the Products Unique or Continuous?
The production process determines the costing system.
Job order costing
Best suited for distinguishable jobs or batches, with costs accumulated by job.
Process costing
Best suited for high-volume continuous production of similar units, with costs accumulated by department or process.
Equivalent units
Equivalent-unit calculations matter in process costing when partially completed units remain in work in process.
Hybrid systems
Real manufacturers can use hybrid systems when parts of production resemble job costing and other parts resemble process costing.
The takeaway
Job order tracks distinguishable jobs. Process costing averages cost through continuous production of similar units.
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FAQ
Are equivalent units central to job order costing?
No.
Can manufacturers use hybrid systems?
Yes.
Does process costing require every unit to be complete at year-end?
No.