Process costing is applicable to production operations that
A) utilize several processes, departments, or work cells in a series.
B) do not assign overhead costs to operations.
C) produce products that are made to order.
D) are found in only a few industries.

Question

Quizplus · Accepted Answer

Process costing is typically used in operations that involve several sequential processes or stages of production, such as in chemical manufacturing, oil refining, or food processing. This method allows for the allocation of costs to each process or department, which is then combined to determine the total cost of the product. Option B is incorrect because overhead costs are assigned in process costing. Option C is incorrect because process costing is used for mass-produced goods, not custom-made items. Option D is incorrect because process costing is used across a variety of industries.

Process Costing Is Applicable to Production Operations That