Which of the following companies would be the most likely to adopt a process costing system?
A) Law firm
B) Toy retailer
C) Motion Picture Producer
D) Cement manufacturer

Question

Quizplus · Accepted Answer

Cement manufacturing involves mass production of a homogeneous product. Therefore, a process costing system is best suited for the cement manufacturer. In process costing, the costs are allocated to each unit of output based on production processes or departments, which is an ideal accounting system for a cement manufacturer. In contrast, law firms, toy retailers, and motion picture producers produce customized products or services, making their production process more challenging to measure using a process costing system.

Which of the Following Companies Would Be the Most Likely