The correct answer is: job costing.
Job costing is a type of costing system that is used to track the costs of individual jobs or projects. It is often used in industries where each job or project is unique, such as manufacturing, construction, and service industries.
In job costing, the costs of direct materials, direct labor, and overhead are assigned to each job or project. The costs of direct materials are the costs of the materials that are used to produce the job or project. The costs of direct labor are the costs of the labor that is used to produce the job or project. The costs of overhead are the costs of all other resources that are used to produce the job or project, such as rent, utilities, and insurance.
The costs of direct materials and direct labor are usually easy to identify and track. However, the costs of overhead can be more difficult to identify and track. Overhead costs are often allocated to jobs or projects based on a predetermined allocation rate. The allocation rate is a percentage of the total overhead costs that is assigned to each job or project.
Job costing provides managers with information about the costs of individual jobs or projects. This information can be used to make decisions about pricing, bidding, and profitability.
The other options are incorrect because they are not types of costing systems.
- Specific order costing is a type of costing system that is used to track the costs of specific orders. It is often used in industries where each order is unique, such as manufacturing and construction.
- Batch costing is a type of costing system that is used to track the costs of batches of products. It is often used in industries where products are produced in batches, such as manufacturing and pharmaceuticals.
- Contract costing is a type of costing system that is used to track the costs of contracts. It is often used in industries where contracts are awarded for specific projects, such as construction and engineering.