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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_
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