If the product is made to a customer's orders or specifications or if products are made in separately identifiable "lots" or "batches," a process cost system is appropriate.

Question

Quizplus · Accepted Answer

A process cost system is not appropriate for products made to a customer's orders or specifications or made in separately identifiable "lots" or "batches." Instead, a job order cost system is more appropriate for these types of products.

If the Product Is Made to a Customer's Orders or Specifications