17-1SE-d
Question
Distinguishing between job order costing and process costing
Would the following companies most likely use job order costing or process costing?
d. A professional service firm
Step-by-Step Solution
Verified Answer
A professional service firm is most likely to use a job-order costing system.
1Job order costing system
A job order costing system is used by an organization to identify the total cost of the product or service provided by the company on an individual job basis.
2Professional service firm
Professional service firms provide services to their client based on different assignments. Hence, they use the job order costing system while computing the service cost.
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