Snoozo Moozo Manufactures Bed Frames and Mattresses That Are Custom-Made

question 12

Multiple Choice

Snoozo Moozo manufactures bed frames and mattresses that are custom-made to a person's height and weight. It is a publicly listed company and therefore must comply with any applicable Australian accounting standards. Which of the following statements is most correct?

• A) Snoozo Moozo should use job costing as it is more applicable to their production process.
• B) Snoozo Moozo should use process costing as it is more applicable to their production process.
• C) Snoozo Moozo should use process costing as it is more applicable to their production process and it is required under applicable accounting standards.
• D) Snoozo Moozo may use either job costing or processing cost, as both are acceptable under applicable accounting standards and both methods can result in accurate production costs.

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Definitions:

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