Asked by Ashhad Hashmi on Mar 10, 2024
Verified
Service firms cannot use job order costing for determining a selling price for their services.
Service Firms
Companies that provide intangible products or services to customers, as opposed to tangible goods.
Job Order Costing
An accounting method that accumulates costs based on individual jobs or orders, suitable for customized products.
- Acquire knowledge on the implementation of job order costing in service organizations, alongside its use in manufacturing companies.
Verified Answer
JF
Joseph ForchtMar 10, 2024
Final Answer :
False
Explanation :
Service firms can use job order costing to determine a selling price for their services. Job order costing involves tracking the direct costs and indirect costs of a specific job or project, which can be applied to service-based projects as well. This information can be used to determine the total cost of providing the service and set a selling price that covers these costs and generates profit.
Learning Objectives
- Acquire knowledge on the implementation of job order costing in service organizations, alongside its use in manufacturing companies.
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