Process costing is a system of
A) inventory costing.
B) cost flow assumptions.
C) product costing.
D) product pricing.

Question

Quizplus · Accepted Answer

Process costing is a system of product costing, which is used to determine the cost of producing products or services. It is used in industries where similar products are produced in a continuous flow, such as in chemical, food processing, and oil refining industries. The cost of each process is accumulated and averaged over the total output. This results in a cost per unit that is used to determine the selling price of the product. Therefore, process costing is not related to inventory costing or cost flow assumptions, and it does not involve product pricing.

Process Costing Is a System of