A manufacturing company may choose to use either a job order cost accounting system or a process cost accounting system,without considering the manner in which it produces its products.

Question

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The choice of cost accounting system is based on how the manufacturing process is structured. A job order cost accounting system is used when a company produces unique, customized products or services, while a process cost accounting system is used when a company produces standardized, mass-produced products or services. Therefore, the manner in which the company produces its products is a deciding factor in choosing the cost accounting system.

A Manufacturing Company May Choose to Use Either a Job