H&R Block

Definition

H&R Block is a prominent tax preparation company that offers services to help individuals and businesses file their taxes accurately. In managerial accounting, understanding the cost structure of service-based businesses like H&R Block can provide insights into job order costing systems.

5 Must Know Facts For Your Next Test

1. H&R Block provides personalized tax preparation services, which aligns with the principles of job order costing where each client's service is unique.
2. Job order costing at H&R Block involves tracking costs for each individual tax preparation service separately.
3. Costs at H&R Block include direct labor (tax professional's time), direct materials (forms and software), and overhead (office expenses).
4. Unlike process costing, which is used for mass production, job order costing is suitable for H&R Block due to the customized nature of their services.
5. Understanding how H&R Block allocates overhead costs to different jobs can illustrate key concepts in managerial accounting related to indirect cost allocation.

Review Questions

• How does job order costing apply to a service-based business like H&R Block?
• What types of costs are tracked in the job order costing system at H&R Block?
• Why is job order costing more appropriate than process costing for companies like H&R Block?

Related terms

Job Order Costing: A cost accounting system that assigns costs to specific jobs or orders based on individual client requirements.

Process Costing: A cost accounting system that accumulates costs for continuous processes or mass-produced items.

Direct Labor: The labor directly involved in providing a service or creating a product, such as a tax professional's time at H&R Block.