Process costing is used when products are:

Question

Quizplus · Accepted Answer

Process costing is most effective and efficient when products are mass produced in large quantities. This is because process costing tracks the costs associated with each stage of production, which is more accurate and easier to do when the number of identical units being produced is high. Custom produced or processed in small batches products would not benefit from process costing because the costs associated with each unit may not be identical. Individualized services are also not suited for process costing as they are not physical products and the costs associated with providing them cannot be easily quantified. Additionally, "Easy to cost" is a vague statement and does not really relate to the suitability of process costing.

Process Costing Is Used When Products Are