Hi sir;
Which of the following is most likely to use job costing?
A. Shipbuilder
B. Steel producer
C. Oil refinery
D. Kittchen fitter
I have asked this questuon in another thread and u explained me that it is most likely the shipbuilder as each ship will be differnt. You told me thst kittchen fitter may also b fiting differnt kitchn consuming difernt resources but he is not producing anything rather he is just fitting.
Sir it does't make sense to me as many service providers uses job costing system for costing purpose as each service is different consuming different resources. So why not kittchen fitter will use job costing?
Ask the Tutor ACCA MA
Job/batch costing
8y ago#1The only resource that the fitter will likely be using is his/her time.
Certainly service providers might use job costing, but the question asked which of the four was most likely to use it.
Plumbers/audit firms also uses job costing. Their main resource is also time. Question is why ship builder is most likely using job costing but not he kittchen fiter. Is this the difference that here the only resource is time for the kittchen fitter?
8y ago#3I can't add to what I wrote before.
No business has to use job-costing, but most businesses can use job costing.
Ship-builders have more need than fitters of kitchens because they need to track the materials used as well as the labour and the overheads, and a kitchen fitter is only usually going to be doing one job at a time.
This is typical of exam questions - when there are 4 statements to choose from, then 2 are almost always clearly wrong, 1 is almost always nearly correct, and 1 is the one the examiner is looking for. Had the question said "which of the following may use job costing" then A and D would both be correct. Because it said "most likely" then A is the best answer.
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