QAEconomics › Which of the following businesses is most likely to use a process costing system?
Q

Which of the following businesses is most likely to use a process costing system?

a) taxidermist

b) law firm

c) brewer

d) housing contractor

A

Answer: C. brewer.

The process costing system is used to label specific products or assign a price to them. The type of products addressed in this system are products that are manufactured on a large scale and are similar.

These products are placed in this system because since they are uniform, it is almost impossible to tell the exact difference between each product, as well as the unit of output of each individual product.

What this means is that due to the product uniformity, the cost of one product is assumed to be the same cost for every other product in that line.

The process costing system is used in the manufacturing industry, therefore, the business that is most likely to use this system is the brewer.

1 year ago
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