Which of the following entities probably would use a process costing system?
A) An oil refinery
B) A yacht builder
C) A custom furniture company
D) A custom screw manufacturer

Question

Quizplus · Accepted Answer

An oil refinery is likely to use a process costing system because it produces large quantities of homogeneous products, such as gasoline or diesel fuel, in a continuous production process. Process costing would allow the refinery to allocate costs to each batch of fuel produced based on its share of the total production cost. This method is particularly suited to industries where output is continuous and there is little variation in the end product.

Which of the Following Entities Probably Would Use a Process