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    Question

    ________ is NOT a feature of process costing; as such,

    聽________ is most likely to adopt a process costing system.
    A Standardized output; Custom furniture workshop; Correct Answer Incorrect Answer
    B Continuous production; Audit firm; Correct Answer Incorrect Answer
    C Heterogeneous products; Sugar refining unit; Correct Answer Incorrect Answer
    D Average cost per unit; Interior design studio; Correct Answer Incorrect Answer
    E Continuous production; Custom furniture workshop; Correct Answer Incorrect Answer

    Solution

    Process costing applies where production is standardized and products are identical or homogeneous, like cement or paper. The process costing is suited to industries requiring mass production at continuous flow and therefore average cost per unit can be easily applied. 聽 Industries suitable for process costing include 路聽聽聽聽聽聽聽 Sugar mills / sugar refining 路聽聽聽聽聽聽聽 Oil refineries (petroleum products) 路聽聽聽聽聽聽聽 Cement plants 路聽聽聽聽聽聽聽 Paper mills 路聽聽聽聽聽聽聽 Chemical & fertilizer plants 路聽聽聽聽聽聽聽 Paint manufacturing 路聽聽聽聽聽聽聽 Steel plants 路聽聽聽聽聽聽聽 Glass manufacturing 路聽聽聽聽聽聽聽 Textile spinning mills 路聽聽聽聽聽聽聽 Food processing (milk, beverages, biscuits)

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