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GigaByte Manufacturing, known for its process costing system to manage the cost of its hard drives, has received a custom order from a government agency

GigaByte Manufacturing, known for its process costing system to manage the cost of its hard drives, has received a custom order from a government agency to produce and deliver 7,500 hard drives. Can GigaByte Manufacturing use a job-order costing system for this custom order despite its regular use of a process costing system?

Requirement:

  1. Compare and contrast process costing and job-order costing.
  2. Evaluate the suitability of using job-order costing for the custom order.

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