Question

Which of the following products probably accounted for by a company using a job order costing system? A) facial tissue B) Hershey Kisses C) Marshmallow Peeps D) A custom built house

Answer 1

Answer: D) A custom built house

Explanation:

Job Order Costing determines the cost of each specific good instead of grouping them all together. When making goods that vary in type, this is the best type of costing method to use as it will take into account the unique cost objects used.

Custom built houses will require cost objects that are different from standadized houses. A specific design will have to be used, non standard material and the like will be used as well. This means that when computing cost, it will have to be specific to the needs of the custom house so it is most probable that Job Order Costing was used.