An operation-costing system is a hybrid-costing system applied to batches of similar, but NOT identical, products.

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An operation-costing system is used when batches of similar products go through a sequence of operations, but each product may not be identical. The costs are allocated to each operation rather than each individual product, making it a hybrid of job costing and process costing.

An Operation-Costing System Is a Hybrid-Costing System Applied to Batches