A company should use process costing instead of job-order costing when
A)products are manufactured to customers' specifications.
B)there is a wide variety of products manufactured.
C)most of the products are similar and can be mass produced.
D)the product requires several different manufacturing processes to be completed.

Question

Quizplus · Accepted Answer

Process costing is best suited for industries where a large number of identical units are produced through a standardized production process. Therefore, when most products are similar and can be mass-produced, process costing should be used. Job-order costing is suitable when products are manufactured to customers' specifications or when there is a wide variety of products manufactured. When a product requires several different manufacturing processes to be completed, both job-order and process costing may be used, depending on the specific circumstances.

A Company Should Use Process Costing Instead of Job-Order Costing