Process costing is used by companies that produce large numbers of identical units of production in a continuous fashion.

Question

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Process costing is used in industries such as pharmaceuticals, chemicals, oil and gas, and food processing, where large quantities of identical products are produced in a continuous or repetitive process. It involves calculating the average cost of each unit of production by dividing the total production costs by the number of units produced.

Process Costing Is Used by Companies That Produce Large Numbers