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Job-order costing is always about a manufacturing firm. Can a service organization benefit from using job-order...

Job-order costing is always about a manufacturing firm. Can a service organization benefit from using job-order costing? Explain your answer.

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Answer #1

Answer

Job Costing is not always about a manufacturing firm. Service organizations also use job-order costing.

Explanation:

Job order costing refers to the type of costing where special orders from customers are received. The job order costing is used in manufacturing as well as service sector organizations. Examples of manufacturing companies that use job-order costing are:

  • clothing business
  • food businesses
  • furniture business
  • craft business

Examples of service sector companies that use job-order costing are:

  • movie producers
  • hospitals
  • accounting firms
  • law firms

So, The job order costing is used in manufacturing as well as service sector organizations.

In case of any doubt or clarification, you're welcome to come back via comments.

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