All of the following statements are correct when referring to process costing except:
A) Process costing would be appropriate for a jeweler who makes custom jewelry to order.
B) A process costing system has the same basic purposes as a job-order costing system.
C) Units produced are indistinguishable from each other.
D) Costs are accumulated by department.

Question

Quizplus · Accepted Answer

Process costing is a system that is used to allocate costs to units of products that are indistinguishable from each other. Therefore, it would not be appropriate for a jeweler who makes custom jewelry to order, as each item would be unique and would require a job-order costing system. Choices B, C, and D are all correct statements regarding process costing.

All of the Following Statements Are Correct When Referring to Process