ExpertEasy2 marksMultiple Choice
ACCA · Question 16 · Cost accounting techniques
Section A
ArchDesign is a bespoke architecture firm that designs unique, custom homes for individual clients.
Which costing method is most appropriate for ArchDesign to determine the cost of its services?
Section A
ArchDesign is a bespoke architecture firm that designs unique, custom homes for individual clients.
Which costing method is most appropriate for ArchDesign to determine the cost of its services?
Answer options:
A.
Process costing
B.
Batch costing
C.
Job costing
D.
Standard costing
How to approach this question
Identify the nature of the output. Unique, custom, one-off projects require a specific costing method.
Full Answer
C.Job costing✓ Correct
Job costing is a form of specific order costing applied where work is undertaken to customers' special requirements and each order is distinct. Since ArchDesign creates bespoke, unique homes, costs must be collected separately for each specific project (job).
Common mistakes
Selecting batch costing, which applies to multiple identical items produced in one run.
Practice the full ACCA MA — Management Accounting Practice Exam 6
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