
Concept explainers
The Main factor to be considered for determining the Costing methods to be used is based on the type of product which is dealt in. The Business dealing with customized products shall apply
To Determine: TheFactors need to be considered for application of costing methods.

Answer to Problem 1DQ
Solution: TheBusiness dealing in customized products which are made specifically as per customer requirement shall apply Job costing. However, the firms used to produce homogenous products going through different processes before being transferred to finished goods shall apply Process costing.
Explanation of Solution
The Process costing is costing method applicable for the firms involved in the manufacturing of homogenous products and such products passes through various processes before get transferred to finished products. The Examples where such costing is applicable is fabrication of steel almirah where the product passes to different processes like fabrication, welding, fitting and painting. Another example being Car manufacturers.
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Chapter 20 Solutions
Fundamental Accounting Principles
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