Multiple Choice
Which type of company is Cane Company if it manufactures two products and sells them to customers?
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4. Merchandising Operations
Service Company vs. Merchandising Company
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Which of the following is most commonly associated with a job order costing system?
A
Custom furniture manufacturing
B
Fast food restaurant operations
C
Supermarket grocery sales
D
Electric utility billing
Verified step by step guidance1
Understand the concept of a job order costing system: It is a costing method used when products are manufactured based on specific customer orders, and each product or batch is unique. Costs are tracked for each job individually.
Analyze the options provided: Custom furniture manufacturing, fast food restaurant operations, supermarket grocery sales, and electric utility billing.
Evaluate the nature of custom furniture manufacturing: This involves creating unique products tailored to customer specifications, which aligns with the principles of job order costing as costs are assigned to specific jobs.
Compare the other options: Fast food restaurant operations, supermarket grocery sales, and electric utility billing typically involve standardized products or services, making them more suited to process costing or other methods rather than job order costing.
Conclude that the most appropriate option associated with a job order costing system is custom furniture manufacturing, as it matches the characteristics of tracking costs for individual jobs.
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