A process costing system is used by companies that manufacture large amounts of similar products or liquid products.

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A process costing system is designed for manufacturing companies that produce large quantities of similar products, such as pharmaceuticals, food, chemicals or beverages. It is used when there is a continuous flow of identical units through the production process and it is necessary to allocate the total costs of each process to the units produced. In contrast, a job costing system is used for companies that produce unique, custom-made products or services.

A Process Costing System Is Used by Companies That Manufacture