Which of the following statements regarding the service industry and/or the application of management accounting techniques to the service industry is incorrect?

A) Service output is much more difficult to define than manufacturing output.
B) Many of the activity measures chosen for service firms tend to be different from those chosen by manufacturing firms.
C) Firms in the service industry should use process costing systems rather than job costing systems.
D) Many service firms use a hybrid costing system.

Question

Marin Shehu · Accepted Answer

Final Answer : C, Explanation :  This statement is incorrect because job costing systems are more common in the service industry than process costing systems. This is because many services are provided on a customized basis for each individual customer rather than as part of a standardized production process.

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