If the principal products of a manufacturing process are identical, a process cost system is more appropriate than a job order cost system.

Question

Quizplus · Accepted Answer

A process cost system is more appropriate when the principal products are identical because it accumulates costs for a specific process rather than for each individual job, resulting in a more accurate cost allocation for identical products. On the other hand, a job order cost system is more appropriate for unique or customized products, where the costs are accumulated for each specific job or order.

If the Principal Products of a Manufacturing Process Are Identical