An operation-costing system is a hybrid costing system, applied to batches of similar products.

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An operation-costing system combines features of both job-order costing and process costing systems. It is used for products that are produced in batches or lots, but each batch requires different operations or stages of production. The costs are accumulated for each operation or stage, and then assigned to the batches produced. This system is useful when products have similar characteristics but can be produced through different processes or operations.

An Operation-Costing System Is a Hybrid Costing System, Applied to Batches