Which of the following is a reason why a job order costing system is appropriate for a custom furniture manufacturer?
A) The cost incurred for each job will differ as per the order specifications.
B) The direct costs incurred for each job are the same, only indirect costs vary.
C) The raw materials used have already been accounted for using process costing.
D) Custom furniture manufacturers produce large quantities of similar products.

Question

Quizplus · Accepted Answer

A job order costing system is appropriate for a custom furniture manufacturer because the cost incurred for each job will differ as per the order specifications. Custom furniture manufacturers produce unique, custom-made products that require different materials, designs, and labor costs for different jobs, making it necessary to track and allocate costs for each job separately.

Which of the Following Is a Reason Why a Job