Process costing would be most applicable for
A) an electronics producer.
B) custom machining.
C) high rise building construction.
D) Audits undertaken by a firm of accountants.

Question

Quizplus · Accepted Answer

Process costing is best applicable for industries that produce homogeneous goods in large quantities, such as electronics. Custom machining (B) involves producing unique and customized products in small quantities, which would be better suited for job costing. High rise building construction (C) involves a mixture of materials, labor, and overhead costs that are unique to each project and would be better suited for job costing. Audits undertaken by a firm of accountants (D) are a service-based industry and not a manufacturing or production-based process, therefore not suitable for process costing.

Process Costing Would Be Most Applicable for