Which of the following statements regarding process costing is TRUE?
A) Process-costing systems use a single Work-In-Process Inventory account.
B) Process costing is used for products that are easily separated and individually identifiable.
C) The unit cost for process costing is found by accumulating the costs for all the manufacturing departments and dividing the total by the number of units produced.
D) The process-costing approach does not distinguish between individual units of product.

Question

Quizplus · Accepted Answer

The process-costing approach does not distinguish between individual units of product, but calculates the average cost of all units produced in a specific period. Option A and B are incorrect because process-costing systems use multiple Work-in-Process Inventory accounts, and are used for products that are not easily separated or individually identifiable. Option C is incorrect because the unit cost for process costing is found by dividing the total cost of goods produced by the number of units produced.

Which of the Following Statements Regarding Process Costing Is TRUE