A process costing system would be best suited for production of a large quantity of a homogeneous product.

Question

Quizplus · Accepted Answer

A process costing system is designed for mass production of a standardized product. It calculates the average cost per unit of output, which is useful for businesses that produce large quantities of a homogeneous product. This helps in determining the cost of production of each unit and setting up appropriate pricing strategies. Therefore, it is best suited for businesses with a continuous flow of production and limited variation in product specifications.

A Process Costing System Would Be Best Suited for Production