Job-order costing is used in those situations where units of a product are homogeneous, such as in the manufacture of sugar.

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Job-order costing is used in situations where units of a product are not homogeneous, such as in custom furniture manufacturing. Process costing, on the other hand, is used in situations where units of a product are homogeneous, such as in the production of sugar, oil, or chemicals. In process costing, costs are accumulated by department or process and then averaged over all units produced.

Job-Order Costing Is Used in Those Situations Where Units of a Product