A process cost system be appropriate for a
A) natural gas refinery
B) jet airplane builder
C) catering business
D) custom cabinet builder

Question

Quizplus · Accepted Answer

A process cost system is typically used in industries that have continuous processes, and where large quantities of a homogeneous product are produced. A natural gas refinery is a good example of such an industry, where crude oil is processed into different petroleum products such as gasoline, diesel, and heating oil. These products are produced in large quantities, and the cost of production can be easily allocated to each unit using a process cost system.

B) A jet airplane builder would likely use a job cost system or a hybrid cost system. Jet airplanes are complex and highly customized product that are produced in small quantities.

C) A catering business would be more suited for a job cost system, as each event or order is unique and requires customized planning, preparation, and delivery.

D) A custom cabinet builder would also be more suited for a job cost system, as each cabinet is unique and customized to the client's specifications.

A Process Cost System Be Appropriate for a