Asked by Logan Machen on May 28, 2024
Verified
Which of the following firms are more likely to use operational costing techniques?
i. Oil refineries
ii. Food processors
iii. Large scale clothing manufacturers
iv. Tourist operators
A) i and ii
B) ii and iii
C) i and iii
D) ii and iv
Operational Costing
The method of calculating the expenses associated with the day-to-day running of a business, including costs of manufacturing and services.
Food Processors
Kitchen appliances used to facilitate repetitive tasks in the preparation of food, such as chopping or mixing.
Large Scale
Operations or activities conducted on a wide-ranging or extensive basis, often implying significant impact or size.
- Identify the characteristics of operational costing and where it is appropriately applied.
Verified Answer
AR
Austin RoutzongMay 29, 2024
Final Answer :
B
Explanation :
Food processors and large scale clothing manufacturers are more likely to use operational costing techniques as they involve complex manufacturing processes that require detailed tracking of direct and indirect costs. Oil refineries may also use operational costing techniques but tourist operators are less likely to as they often focus more on variable costs such as marketing and advertising.
Learning Objectives
- Identify the characteristics of operational costing and where it is appropriately applied.