Cost accounting is the "measurement, analysis and reporting of financial and non-financial information relating to the costs of acquiring or using resources in an organization". (Horngren, Datar, Rajan, 2012). There are many different methods available to determine the cost of each step or product involved in the production of a cost object, this document will explore the differences and similarities between labor costing and process costing. A job cost system involves collecting all information about the costs associated with each service job or product manufactured. There are six steps involved in job costing. The first step is to identify the work that constitutes the chosen cost object. A labor cost record is used to record how many different materials are used in production, as well as how many labor hours are used to create the product. The second step is to identify the direct costs of the job. There are two types of direct costs that must be calculated: direct materials and direct manufacturing labor. When employees order materials, they are recorded in a materials requisition register that contains information about the cost of direct materials used on a specific job in a specific department. Direct manufacturing labor is accounted for using a labor time sheet that contains information about the amount of labor time used for specific jobs in specific departments, as well as the hourly wage earned. All costs other than direct materials or direct manufacturing labor are considered indirect costs. The third step is to select the cost allocation bases to use to allocate indirect costs to labor. Indirect costs are “expenses incurred for joint use and, therefore, difficult to attribute or identify with a… means of paper… where it may be, while the process cost is more of an overall cost for each job because it is cumulative of all costs involved in producing a product, but labor costing is not necessarily cost-effective in every situation, so it is more appropriate to implement process costing in those situations. Works Cited Horngren, C., Datar, S., Rajan, M. (2012). Cost Accounting: A Managerial Emphasis (14th ed.). Upper Saddle River, NJ: Pearson Indirect Costs. (2014). Online business dictionary. Retrieved from: http://www.businessdictionary.com/definition/indirect-cost.htmlProcess Costing. (2014). Online business dictionary. Retrieved from: http://www.businessdictionary.com/definitio/process-costing.htmlWhat is a job costing system? (2013). Accounting tools. Retrieved from: http://www.accountingtools.com/questions-and-answers/what-is-a-job-costing-system.html