Learning Objective 03-A1: Illustrate a hybrid costing system and analyze process system yield. What is the best rationale for why many companies use a hybrid costing system?

 Learning Objective 03-A1: Illustrate a hybrid costing system and analyze process system yield.


A hybrid costing system contains features of both job order and process costing systems. Generally, certain direct materials are accounted for by individual products as in job order costing, but direct labor and overhead costs are accounted for similar to process costing.

What is the best rationale for why many companies use a hybrid costing system?

multiple choice

    Job order costing systems have proven to be ineffective in costing individual customer needs.
    Process costing systems have proven to be ineffective in costing standardize processes.
    Companies are increasingly trying to standardize processes while attempting to meet individual customer needs. Correct
    Companies are increasingly trying to apply more inexpensive costing systems to meet customer needs.

Explanation

Knowledge Check 01

Companies are increasingly trying to standardize processes while attempting to meet individual customer needs. A hybrid costing system meets these needs.