Question

Which of the following companies is most likely to use an operation-costing system?

		a company that makes suits for which the basic design is same, but depending on specifications, each batch of suits varies somewhat from other batches
		a company involved in manufacture of ball bearing on a large scale
		a company that has been awarded a contract to construct a bridge for the government
		a furniture making company which makes furniture pieces as per the specifications of the customers

Answer 1

A company that makes suits for which the basic design is same, but depending on specifications, each batch of suits varies somewhat from other batches is most likely to use an operation-costing system

Option A is correct

Note:

Operation-costing system is a mix of both process costing ang job-order costing.

Company involved in manufacture of ball bearing on a large scale would use Process costing

A company that has been awarded a contract to construct a bridge for the government would use job order costing

A furniture making company which makes furniture pieces as per the specifications of the customers would use job order costing