In job order costing, costs are accumulated by:

a) Department
b) Production order
c) Activity
d) Product line

A job order costing system accumulates the costs associated with a specific batch of products. This system is used for small batch sizes, and especially when the products within each batch are different from the products created in other batches. In these situations, management wants to ensure that the costs incurred are reasonable when compared to the prices charged to customers. For example, the system could be used to track the costs of custom-made machinery. Without a job order system, it is likely that a business would quote the prices of some batches too low, thereby incurring losses.