Process costing systems:
A)Are used when companies produce homogeneous units.
B)Do not have work in process accounts for each department.
C)Do not use equivalent units of production.
D)Track costs to individual products.

Question

Quizplus · Accepted Answer

Process costing systems are used when companies produce homogeneous units, such as bricks, gasoline, or bottled water. In process costing, multiple batches or units of the same product are produced through a series of standardized steps or processes, and costs are accumulated and assigned to each batch or unit based on their degree of completion. This is different from job costing, where each product is unique and costs are tracked to individual jobs. Process costing systems also have work in process accounts for each department, and use equivalent units of production to measure the amount of work done in each department.

Process Costing Systems