
Concept explainers
The
The method of costing to be used by various companies depending upon their requirements need to be determined.

Explanation of Solution
Solution: d. Advertising Agency-Job order costing: Cell Phone companies-Process Costing
Job costing method is used by the companies which produces different customized product each time the production is made. However, the process costing method is used by the companies which produces identical units of single product during the production period. Therefore, Advertisement Agency which has to cater to the customized demand of each client job which is not identical in one or more respect, will use the Job costing method. However, the mobile manufacturing companies, which produces a large number of identical units of single model will use the Process Costing method.
To conclude, it must be said that Advertisement agency must use Job costing method and Cell phone manufacturing company must use Process costing method.Therefore, for the given problem, the answer is as follows:
d. Advertising Agency-Job order costing: Cell Phone Companies-Process Costing
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Chapter 19 Solutions
Horngren's Accounting (12th Edition)
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