Asked by Jacob Murphree on Jun 12, 2024
Verified
Large aircraft manufacturers normally use:
A) Job order costing.
B) Process costing.
C) Mixed costing.
D) Full costing.
E) Simple costing.
Large Aircraft Manufacturers
Companies that specialize in the development, assembly, and selling of aircrafts that have a high passenger or cargo capacity.
Process Costing
An accounting methodology applied where production is continuous, assigning costs to units of product on the basis of process they go through.
- Understand the differences between job order costing and process costing systems.
Verified Answer
AS
Agila SrinivasanJun 16, 2024
Final Answer :
A
Explanation :
Large aircraft manufacturers typically produce a limited number of unique products (such as specific models of airplanes) with significant variation in production requirements, materials, and labor costs. Therefore, job order costing is the best choice as it allows the manufacturer to assign costs to specific jobs or products based on their unique specifications and production requirements. This method provides more accurate product cost information, which is crucial for pricing decisions, controlling costs, and evaluating profitability.
Learning Objectives
- Understand the differences between job order costing and process costing systems.