Which of the following companies is most likely to use process costing?
A) Crimpson Color, a company selling customized garments for niche customers
B) Effel & Associates, a consulting firm providing various audit and related services
C) Red Paste Inc., a company manufacturing and selling toothpaste on a large scale
D) Grimpy Corp., a company manufacturing furniture for customers as per their requirements

Question

Quizplus · Accepted Answer

Process costing is typically used in manufacturing companies that produce homogeneous products in large quantities, such as Red Paste Inc. Customized garment manufacturing (A) and furniture manufacturing as per customer requirements (D) are more likely to use job costing. Consulting firms (B) would not use either job or process costing.

Which of the Following Companies Is Most Likely to Use