Companies that manufacture identical items through a series of uniform production steps use ________ to determine cost per unit sold.
A) a process costing system
B) a job order costing system
C) the weighted-average method
D) the first-in, first-out method

Question

Quizplus · Accepted Answer

A process costing system is designed for companies that manufacture identical items through a series of uniform production steps. This system calculates the cost per unit based on the total costs of the process, divided by the number of units produced. This approach is best suited for companies that produce large quantities of identical goods, such as chemical manufacturers or food processors. The other choices, job order costing system, the weighted-average method, and the first-in, first-out method, are not as suitable for companies that use a uniform production process.

Companies That Manufacture Identical Items Through a Series of Uniform