Go to www.YouTube.com and search for How It’s Made, a television show produced by the Discovery Channel that shows how thousands of products and services are created. Find a product or service for which job order costing would be appropriate, such as animated films, special effects make-up, luxury sports cars, artificial limbs, or other specialized products or services. Watch the video and answer the following questions:
• What product or service did you choose? Why is job order costing appropriate for this setting?
• Why does the company that makes the product or service need a cost system? Describe two decisions a manager would make based on cost information.
• List two direct costs of making the product or service. Describe how the company would track these costs to specific jobs, projects, or customers?
• List three indirect costs of making the product or service. Describe how the company would assign these costs to specific jobs, projects, or customers? What allocation base (cost driver) would be appropriate for this setting?