When should process costing techniques be used in assigning costs to products?
A) Any time production is only partially completed during the accounting period.
B) If the product is composed of mass-produced homogeneous products.
C) If the product is manufactured according to customer specifications.
D) All of these.

Question

Quizplus · Accepted Answer

Process costing techniques are best used when products are composed of mass-produced homogeneous products. This is because the costs can be easily assigned to each unit of the product, which is consistent in terms of materials, labor, and overhead. If the product is manufactured according to customer specifications, then job costing techniques would be more appropriate. Partially completed production during the accounting period would require a combination of both process and job costing techniques. Therefore, option D is also incorrect.

When Should Process Costing Techniques Be Used in Assigning Costs