Process-costing systems separate costs into cost categories according to which factor(s)?
A)physical units
B)indirect labour
C)fixed and variable costs
D)standard costs
E)direct materials, conversion costs, and in some cases, transferred-in costs

Question

Quizplus · Accepted Answer

Process-costing systems follow the formula of categorizing costs into direct materials, conversion costs (direct labour and overhead), and in some cases, transferred-in costs from previous departments. This method is used for products that are mass-produced or where the production process is continuous. Thus, option E is the correct choice.

Process-Costing Systems Separate Costs into Cost Categories According to Which