Process Costing Is Used to Account For

question 36

Multiple Choice

Process costing is used to account for:

• A)large numbers of identical products that are produced in a continuous manufacturing environment.
• B)small number of products that are produced in batches.
• C)raw materials that are converted directly to finished goods.
• D)finished goods that are refined and processed further.
• E)large number of products that are produced in a non-repetitive process.

---

Definitions:

Planning Budget

A budget prepared for a specific level of activity, detailing the expected revenues and expenses to guide financial planning.

Net Operating Income

A profitability measure calculated as the difference between a company's revenues from its operations and its operating expenses, excluding non-operating expenses and income.

Administrative Expenses

Costs related to the general management and administration of an organization, such as salaries of executive officers and costs of legal services.

Net Operating Income

The profit a company makes from its usual business operations, before taxes and interest, calculated by subtracting operating expenses from revenue.