First of all let us understand basic diffrance between both of them .Process costing handles the same types of manufacturing costs as job order costing. Both Process costing and Job Order Costing systems deal with tracking how manufacturing costs such as direct materials, direct labor, and overhead flow through work-in-process to finished goods and finally, when the goods are sold, to cost of goods sold.

Description of the cost flow using the Process Cost System.

Cash flow in process costing means direct material costs are added at the beginning of the process, while all other costs (direct labor and overhead) are gradually added over the course of the production process.

Let me give you one example

In food processing operation, the direct material (such as a Egg) is added at the beginning of the operation, and then various rendering operations gradually convert the direct material into finished products

cost flow different from the cost flow using the Job Order Costing System

Job order costing counts costs by job, using job order cost sheets that stay with the inventory as it flows through the production process.

On the other hand, Process costing, Count costs by department. Process costing gives each department its own separate work-in-process (WIP) account for accumulating costs and tallies costs at the end of each fiscal period; job order costing uses only a single WIP account for all unfinished jobs and tallies the cost of a job when it’s finished.

process costing measures the cost of work actually done on WIP during a period and in job order costing it measures the cost of each individual job

Flollowing is formula for unit cost calculation in a job order costing system is:

Unit Cost = Total Job Cost / Number of Units Produced in Job

on the other hand

Flollowing is formula for unit cost calculation in a process cost system is:

Unit Cost = Department’s Periodic Cost / Number of Units Produced in the Period

Which method is more effective – the Job Order Costing System or the Process Costing System?

Process Cost System applies costs to departments based on the average number of units produced per day.on the other hand Job order costing records the actual materials and labor expenses for specific jobs, and assigns overhead to jobs at a pre-determined rate. In Process Cost System and Job order costing   have unique advantages and disadvantages that make them best suited for specific situations.