For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system?
A) a steel factory that processes iron ore into steel bars
B) a factory that processes sugar and other ingredients into black licorice
C) a costume maker that makes specialty costumes for figure skaters
D) all of these

Question

Quizplus · Accepted Answer

A job-order costing system is typically used for businesses that produce unique or custom products, rather than standardized products. The costume maker that makes specialty costumes for figure skaters fits this description, as each costume is likely to be unique and made to specific measurements and requirements.

A process costing system, on the other hand, is used for businesses that produce standardized products in large quantities. The steel factory and black licorice factory are more likely to use this type of costing system, as they likely produce the same types of products over and over again using a standardized process.

For Which Situation(s) Below Would an Organization Be More Likely