Which costing method is applicable in situations where each job is unique and performed to the customer's specifications?

Job costing is the appropriate method in situations where each job is unique and tailored to customer specifications because it allows for the accumulation of costs for each specific job or project. This method facilitates the tracking of direct materials, direct labor, and overhead costs associated with a particular job, enabling detailed reporting and analysis. Since each job can vary significantly in terms of resource requirements and costs, job costing provides the necessary flexibility to allocate expenses based on actual usage and requirements, ensuring that pricing and financial analysis reflect the true cost of each unique order.

In contrast, standard costing is more suited for situations where products are mass-produced, as it relies on predetermined costs that do not necessarily account for the uniqueness of each order. Activity-based costing, while effective for understanding cost behavior and resource consumption across various activities, does not focus specifically on individual jobs but rather on activities that contribute to production. Variable costing is primarily concerned with separating variable costs from fixed costs in the context of overall budgeting and decision-making, rather than with job-specific costing. Thus, job costing meets the needs of unique, customized projects efficiently.