Multiple Choice
A firm fills its customer's orders from finished goods inventory. It is a:
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4. Merchandising Operations
Service Company vs. Merchandising Company
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
For which of the following businesses would a job costing system be most appropriate?
A
A custom furniture manufacturer
B
A fast-food restaurant
C
A gasoline station
D
A grocery store
Verified step by step guidance1
Understand the concept of a job costing system: A job costing system is used to track costs for specific jobs or projects, making it ideal for businesses that produce unique or customized products or services.
Analyze the nature of each business option: Determine whether the business produces customized products or services, as this is the key characteristic for using a job costing system.
Evaluate the custom furniture manufacturer: Custom furniture manufacturing involves creating unique, tailored products for individual customers, which aligns perfectly with the job costing system's purpose.
Consider the fast-food restaurant, gasoline station, and grocery store: These businesses typically produce standardized products or services in large quantities, making them better suited for process costing or other systems rather than job costing.
Conclude that a custom furniture manufacturer is the most appropriate business for a job costing system, as it requires tracking costs for individual, customized jobs.
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