Which statement best distinguishes job-order costing from process costing?

• A. Job-order costing tracks costs by individual jobs; Process costing assigns costs by department or process for mass production.
• B. Job-order costing tracks costs by department; Process costing assigns costs by individual jobs.
• C. Job-order costing uses actual costs; Process costing uses standard costs.
• D. There is no difference between them.

Answer: (A)

The main idea is how costs are accumulated in different costing systems. Job-order costing assigns costs to each individual job or order, capturing materials, labor, and overhead specifically for that job. This fits customized work where every job is unique and you need to know the cost per job. Process costing, on the other hand, accumulates costs by department or by process as units move through a production flow, which suits mass production of homogeneous goods. Costs are averaged over the units produced, often using equivalent units if some work is incomplete.

So the best statement is that job-order costing tracks costs by individual jobs, while process costing assigns costs by department or process for mass production. The other ideas mix up the scope (department vs job) or imply a universal use of standard costs, which isn’t what differentiates the two systems.