Note: For more detailed discussions, see individual courses for each costing system.

ACTUAL COSTING – product costs are accumulated using their actual amount.

NORMAL COSTING (TRADITIONAL) – direct materials and direct labor are accumulated using their actual amount, while manufacturing overhead is accumulated using a pre-determined rate (usually based on Direct labor hours)

JOB ORDER COSTING – products are made upon receipt of orders, based on customer’s needs or specifications. Costs are assigned to individual product or orders.

PROCESS COSTING – used by companies that mass produces homogeneous products. Usually for high-demand products, or products that are part of basic needs of the people.

STANDARD COSTING – costs are accumulated using standard costs (pre-determined) for materials, labor, and overhead.

BACKFLUSH COSTING (JUST IN TIME) – costs are incurred as needed. Usually, no stock is being kept or a very small amount only. Recording of costs are done at specific points (called trigger points).

ACTIVITY-BASED COSTING – Overhead costs are broken down and allocated on the basis of cost objects (as against Traditional costing that uses a pre-determined rate based on direct labor hours).

HYBRID PRODUCT COSTING – a costing system that incorporates two or more costing systems. Normally, standard costing can be used with Job Order Costing, or with Process Costing. Also, activity-based costing can be used with Job Order Costing, or with Process Costing. In fact, you can use Job Order Costing with Process Costing, they call it operations costing. Could be confusing, but know it’s existing. :)