Accounting · Service Costing
A Service Costing system primarily differs from a Manufacturing Costing system (such as Job or Process Costing) in which fundamental aspect?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The requirement to separate fixed costs from variable costs for profit calculation.
- 2The mandatory application of activity-based costing (ABC) for all service cost analysis.
- 3The difficulty in selecting a suitable, often composite or abstract, cost unit for measurement.✓
- 4The complete absence of indirect costs or overheads in service industries.
Correct answer
The difficulty in selecting a suitable, often composite or abstract, cost unit for measurement.
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