17-1SE-c
Question
Distinguishing between job order costing and process costing
Would the following companies most likely use job order costing or process costing?
c. A manufacturer of luxury yachts
Step-by-Step Solution
Verified Answer
A manufacturer of specialty wakeboards is most likely to use a job-order costing system.
1Costing system
The company uses the costing system to know about the total cost incurred to produce the company's products. It is classified as the job order costing system and the process costing system
2Job order costing
The job order costing system identifies the total cost of manufacturing the special or luxury product. It is used when the manufacturer produces a small quantity or unique batch of the product. Hence, the manufacturer of luxury yachts is most likely to use a job-order costing system.
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