In a job-order costing system, costs are traced to departments and then allocated to units of product using an average process.

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In a job-order costing system, costs are traced to specific jobs or orders instead of departments, and the costs are allocated to those specific jobs or orders. The allocation of costs is based on the actual costs incurred for each job or order, rather than using an average process.

In a Job-Order Costing System, Costs Are Traced to Departments