When a company's cost accounting system uses process costing, work-in-process is accumulated based on:
A) batches.
B) specific inventory projects.
C) raw materials less shrinkage.
D) periodic labor charts.

Question

Quizplus · Accepted Answer

Process costing is typically used by companies that produce large quantities of homogeneous products, such as chemicals or food products. Work-in-process is accumulated based on batches in process costing, meaning that costs are accumulated and averaged across a large number of identical units that are produced in the same batch. This allows for more accurate cost tracking and pricing decisions, as well as easier inventory management.

When a Company's Cost Accounting System Uses Process Costing, Work-In-Process