Process costing techniques should be used in assigning costs to products:
A)If the product is manufactured on the basis of each order received.
B)In all manufacturing situations.
C)When production is only partially completed during the accounting period.
D)If the product is composed of mass-produced homogeneous units.

Question

Quizplus · Accepted Answer

Process costing is used in situations where mass-produced homogeneous units are being manufactured. This method is particularly effective in assigning costs to each unit of output and determining the cost per unit. It is not suitable for situations where each product is manufactured based on a separate order or when production is only partially completed during the accounting period. Therefore, option A, B, and C are not the best choices.

Process Costing Techniques Should Be Used in Assigning Costs to Products