Question

LO 4.1Which of the following product situations is better suited to job order costing than to process costing?

Each product batch is exactly the same as the prior batch.
The costs are easily traced to a specific product.
Costs are accumulated by department.
The value of work in process is based on assigning standard costs.

Answer 1

The costs are easily traced to a specific product.

The correct answer is B

Step-by-step explanation:

Job costing is a specific order costing method in which jobs are undertaken in order to meet customers' specific requirements. In job costing, costs are easily traced to a specific product or job.

Process costing is a continuous operation costing method in which products are produced as a mass of items moving from one process or department to another. In process costing, costs are not easily traced to a specific product.