ExpertEasy2 marksMultiple Choice
ACCA · Question 15 · C. Cost accounting techniques
An independent film production company creates bespoke documentary films for various streaming platforms. Each documentary has a unique script, distinct cast, and specific location requirements.
Which costing method is most appropriate for this company?
An independent film production company creates bespoke documentary films for various streaming platforms. Each documentary has a unique script, distinct cast, and specific location requirements.
Which costing method is most appropriate for this company?
Answer options:
A.
Process costing
B.
Batch costing
C.
Job costing
D.
Service costing
How to approach this question
Identify the nature of the output: unique, bespoke, distinct requirements. This points directly to job costing.
Full Answer
C.Job costing✓ Correct
Job costing is applied where work is undertaken to customers' special requirements and each order (or 'job') is of comparatively short duration and unique. A bespoke documentary film fits this definition perfectly.
Common mistakes
Selecting service costing. While film production is a service industry, the accumulation of costs for a specific, unique project is the definition of job costing.
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