Final answer:
Job costing systems are ideal for service and manufacturing businesses, like hospitals and custom manufacturers, which require tracking of costs on a job-by-job basis. Merchandising companies typically use different accounting methods, as job costing is less suited to businesses that do not incur substantial job-specific costs.
Step-by-step explanation:
The types of businesses that can use a job costing system are primarily service and manufacturing businesses. Job costing is a method used to assign manufacturing costs to an individual product or batches of products. Essentially, any business that can trace specific costs to individual jobs and orders and needs to keep track of these, might use job costing.
Manufacturing companies, such as those producing customized products or those that undertake one-off projects, utilize job costing to accurately define the costs associated with each unique product. On the other hand, service businesses, like law firms and accounting firms, use job costing to determine the cost associated with serving each client since their services are often tailored to individual needs.
Merchandising businesses, however, generally use other costing methods, such as cost-of-goods-sold models, since they are retailing products they have purchased rather than creating custom products. Therefore, they might not find job costing as beneficial as businesses that have job-specific expenses that vary significantly from one job to the next.