The correct answer is: C. Both A and B.
Service costing is a method of accounting that is used to track the costs of providing services. It is used in a variety of industries, including healthcare, hospitality, and financial services.
Service costing is similar to product costing in that it involves identifying the costs of direct materials, direct labor, and overhead. However, service costing also includes costs that are unique to services, such as customer acquisition costs and customer service costs.
Service costing is important because it helps businesses to understand the costs of providing services. This information can be used to set prices, make decisions about pricing strategies, and evaluate the profitability of services.
Here is a brief explanation of each option:
- Option A: Products. Products are tangible goods that are produced by businesses and sold to consumers. The costs of producing products include the costs of direct materials, direct labor, and overhead.
- Option B: Services. Services are intangible activities that are performed by businesses for consumers. The costs of providing services include the costs of direct materials, direct labor, and overhead, as well as costs that are unique to services, such as customer acquisition costs and customer service costs.
- Option C: Both A and B. Service costing is used in industries producing both products and services.
- Option D: None of these. Service costing is not used in industries producing none of these.