A company that applies process costing is most frequently characterized by:
A) Low standardization and high production volume.
B) Custom orders and homogeneous products.
C) Repetitive production and heterogeneous products.
D) Repetitive production and low production volume.
E) Homogeneous product and high production volume.

Question

Quizplus · Accepted Answer

A company that applies process costing typically has a high production volume of homogeneous products. Process costing is a cost accounting method that accumulates costs by process or department, rather than by individual product or order. It is best suited for companies that have standardized processes and high-volume production of similar products. Therefore, choice E is the most appropriate option.

A Company That Applies Process Costing Is Most Frequently Characterized