A company that applies process costing is most frequently characterized by:
A)Low standardization and high production volume.
B)Custom orders and mass production.
C)Repetitive production and unique products.
D)Repetitive production and low production volume.
E)Similar products and high production volume.

Question

Quizplus · Accepted Answer

A company that applies process costing typically produces similar products in large quantities. This allows for the accumulation of costs over the production process and the division of those costs by the total number of units produced, resulting in a cost per unit. Option E describes this characteristic accurately. The other options involve unique or custom products, low production volumes, or low standardization, which are not typical of companies that apply process costing.

A Company That Applies Process Costing Is Most Frequently Characterized