Generally Accepted Accounting Principles (GAAP)mandates the type of product costing system (job costing or process costing)that must be used by a manufacturer.

Question

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GAAP does not mandate the type of product costing system to be used by a manufacturer. The manufacturer can choose either job costing or process costing based on the nature of its manufacturing process. However, GAAP does mandate that the chosen costing method should be consistently applied across all products and periods.

Generally Accepted Accounting Principles (GAAP)mandates the Type of Product Costing