Which of the following would use a process costing system?
A)a custom home builder
B)a custom furniture manufacturer
C)a wedding dress designer
D)a lumber mill

Question

Quizplus · Accepted Answer

A lumber mill would use a process costing system because it involves a continuous flow process where large quantities of similar products, such as boards or planks, are produced. Each unit of product will be identical, and the cost of production will be averaged across all units produced during the period. This is the essence of process costing. Custom home builders, custom furniture manufacturers, and wedding dress designers would all use job costing systems because their products are unique and produced to order.

Which of the Following Would Use a Process Costing System