Question
Amita loves baking. She worked with a bakery which was
famous for its cookies and cakes. However, Amita loved making cakes like a piece of art. She later started her own bakery service where she made beautiful cakes, each made to order. Which type of costing method is most suitable for Amita to follow?ÂSolution
Job Costing or Job Order Costing means ascertaining the cost of a specific job. It is used by industries that perform specific jobs related to the customized needs of the customers. Example – selling the contract of printing papers or construction industry, interior decoration, garage, etc.  Since customised cakes made each as per individual order is a specific job, job costing is most suitable.
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The company's sales tea...
