Question

Which 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.

Step-by-step explanation:

Job order costing involves production of products that are not identical whereas the costs expended on such production are easily traceable to the final product output. In other words , job order costing is basically used for custom jobs, hence very easy to know the make up cost of direct labor and materials used for each job.

In job order costing, specific cost is placed on each material and labor to the product, hence very expensive to use unlike process costing which work best for products that are identical and whose costs cannot be readily traced to its final output.