Which of the following characteristics applies to process costing?
A)Differentiated products are provided on a special order basis.
B)Cost are accumulated by department.
C)Cost are accumulated by jobs.
D)Direct labor workers must keep detailed records as to the jobs on which they worked.

Question

Quizplus · Accepted Answer

Process costing is used when a large volume of homogeneous products are produced in a continuous fashion. Cost are accumulated by department or process rather than by individual job, therefore B is the correct choice. Choices A, C, and D are all characteristics of job costing, which is used in situations where products or services are manufactured or provided on a customized basis.

Which of the Following Characteristics Applies to Process Costing