Question

Job order costing and process costing are O a. pricing systems Ob.cost accounting systems Oc. cost flow systems Od. inventory tracking systems o

Answer 1

The correct option here is  (b) Cost accounting systems

There are two main cost accounting systems: the job order costing and the process costing.

Job order costing is a cost accounting system that accumulates manufacturing costs separately for each job. It is appropriate for firms that are engaged in production of unique products and special orders. For example, it is the costing accounting system most appropriate for an event management company, a niche furniture producer, a producer of very high cost air surveillance system, etc.

Process costing is a cost accounting system that accumulates manufacturing costs separately for each process. It is appropriate for products whose production is a process involving different departments and costs flow from one department to another. For example, it is the cost accounting system used by oil refineries, chemical producers, etc.