Question

TP1. LO 4.1Can a company use both job order costing and process costing? Why or why not?

Answer 1

Answer:

yes a company can use both job order costing and process costing

Explanation:

job order costing involve an a detailed accumulation of production cost,  which is attributed to specific unit. an illustration can be in the construction of a well designed piece of furniture which would be accounted for with a job costing system. the coast of the labour for that piece of furniture will be recorded on a time sheet and compiled on a cost sheet for that job.

while process costing involves the accumulation of cost for a lengthy production run involving products that are indistinguishable from each other.

in a situation where a company has mixed production system, that produces large quantities but customizes it finished product before shipment, it is possible to adopt both job order costing and process costing which is formally known as hybrid costing.