Which of the following companies is most likely to use an operation-costing system?
A) a company involved in manufacture of ball bearing on a large scale
B) a company that has been awarded a contract to construct a bridge for the government
C) a company that makes suits for which the basic design is same, but depending on specifications, each batch of suits varies somewhat from other batches
D) a furniture making company which makes furniture pieces as per the specifications of the customers

Question

Quizplus · Accepted Answer

Operation-costing is a hybrid costing system used in manufacturing goods that have some common characteristics and some individual characteristics. Choice C, a company that makes suits with a basic design but allows for variations in each batch, fits this description because it combines elements of both process costing (for the common design) and job costing (for the individual specifications).

Which of the Following Companies Is Most Likely to Use