Which of the Following Would Use a Process Costing System

question 125

Multiple Choice

Which of the following would use a process costing system rather than a job order costing system?

• A) a health-care service provider
• B) a music production studio
• C) a paint manufacturer
• D) a home remodeling contracting company

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Definitions:

Perpetual Inventory System

An inventory management method where updates to the inventory account occur continuously as transactions happen.

Weighted-Average Method

An inventory costing method that averages the cost of all similar goods available during the period.

Periodic Inventory

An inventory system where the inventory count and cost of goods sold calculations are conducted at specific intervals.

FIFO

FIFO (First-In, First-Out) is an inventory valuation method where goods first purchased or produced are the first ones sold.