Q17-2RQ - Horngren'S Financial And Managerial Accounting

Question

Question: What types of companies use job order costing systems?

Step-by-Step Solution

Answer

Answer:

Accounting firms, building contractors, furniture manufacturer, etc., use job order costing system.

Step 1: Costing system

A costing system is designed to monitor the cost incurred by the company. Job order costing, process costing and direct costing are the main costing methods used by the companies.

Step 2: Job order costing system

Companies that manufacture unique goods or provide specialized services uses the job order costing system. Accounting and law companies, contractors, medical services, etc., use this costing method.