When Should Process Costing Techniques Be Used in Assigning Costs

question 138

Multiple Choice

When should process costing techniques be used in assigning costs to products?

• A) when the product is unique and made to order
• B) when the product is manufactured according to customer specifications
• C) when the product is composed of mass-produced homogeneous products
• D) any time production is only partially completed during the accounting period

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Definitions:

Increased Efficiency

The improvement of a system or process's ability to produce a desired output with a minimum amount of input, effort, or expense.

Specialization

The process of focusing on a narrow area of expertise or activity to increase efficiency and productivity.

Product-Oriented Production

A production strategy that focuses on producing goods in large volumes with minimal variation, typically associated with mass production environments.

Process Strategy

An organization's approach to transforming resources into goods and services.