alleryStart learning →Job order costing accumulates costs for which kind of production?
AItems or batches of items that are unique
BIdentical items made in a continuous flow
COnly services billed at an hourly rate
DItems whose costs are averaged monthly
Answer & Solution
Correct answer: A. Items or batches of items that are unique
1. Job order costing is a method of cost accumulation used for items or batches of items that are unique.
2. Custom kitchen cabinets are the standing example, since sizes, layouts, wood, finishes and hardware differ on every order.
3. Each single or batch order is called a job and carries its own identification number.
4. Large quantities of identical items in continuous flow are costed by process costing instead.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 2.1 Introduction_
Keep practising Job Order Costing
Browse all Job Order Costing questions for US CMA Part 1, or explore more Management Accounting topics.
Related questions
What changes when job order costing is applied to a service business such as a law or accoWhich account is never used when estimated factory overhead is adjusted to the actual amouApplied factory overhead was $2,100 and actual factory overhead turns out to be $2,050. WhHow is a predetermined factory overhead rate calculated?Which three costs are debited to Work in Process under job order costing?True or false: applied overheadTap the cost that does not belongTap the wrong account