Final answer:
Company A is likely to use job order costing due to the uniqueness of custom-made furniture, Company B will use process costing for their standard and continuous soft drink production, Company C might apply job order costing principles for individual legal cases, and Company D might use a form of process costing for food preparation and service.
Step-by-step explanation:
Job order costing and process costing are two distinct methods used by businesses to track production costs. Custom-made or unique products are usually tracked using job order costing because each job has different production requirements and costs. Meanwhile, process costing is used for homogeneous products that are produced in a continuous flow. Here's how the different companies are likely to use these costing methods:
- Company A (Custom-made furniture): Likely to use job order costing because each furniture piece can be customized and likely has different material and labor requirements.
- Company B (Soft drinks manufacturing): Likely to use process costing due to the standardized and continuous nature of production.
- Company C (Legal services): While not a manufacturing operation, job order costing could be analogous to tracking time and expenses for individual cases or clients.
- Company D (Fast food restaurant): Not typically associated with job order or process costing, but could use a system similar to process costing for tracking the cost of food preparation and service processes.