Banana Shirts produces t-shirts in large batches. Most of its t-shirts are made of regular cotton, although some are made from ethically produced cotton. The manufacturing process is relatively simple; most t-shirts go through similar processes; the main difference is whether the t-shirt requires embroidery or printing. The most appropriate costing system for Banana Shirts is
A) process costing system.
B) job costing system.
C) operation costing systems.
D) both job costing system and operation costing system are appropriate.

Question

Quizplus · Accepted Answer

Operation costing systems are suitable for Banana Shirts as they combine elements of both job and process costing, allowing for the differentiation in costs between regular and ethically produced cotton, as well as the different processes like embroidery or printing.

Banana Shirts Produces T-Shirts in Large Batches