Which costing method is most appropriate for a firm that makes a single customised piece of furniture to each customer's specification?
Answer and explanation
Correct answer: C. Job costing
- Step 1: Each piece is made to an individual order, with costs collected for that specific job.
- Step 2: Job costing fits one-off, customer-specific work.
- Step 3: The other methods assume identical units or services.
Answer
Job costing.
Why not the others: Process costing: Process costing suits continuous production of identical units. Service costing: Service costing is for organisations that provide services rather than make products. Batch costing: Batch costing suits groups of identical items made together, whereas each order here is different.
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