Q 15E_a - Horngren'S Financial And Managerial Accounting

Question

Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costing.

a. Companies that produce small quantities of many different products.

Step-by-Step Solution

Answer

Answer:

Job order costing system is used by the company if they produce small quantities of many different products.

Step-by-Step Solution:

Step 1: Job order costing system

Job order costing system of costing is used by the companies that manufacture goods in small quantities or unique batches of product.

Step 2: Classification of costing system according to the characteristics

As per the definition of job order costing system, the companies that produce small quantities of many different products are most likely to use the job order costing system for ascertaining the costing of the products.