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Business Studies

Importance of Controlling

Process costi...

Question

Process costing method is adopted by industries _____________.

A

Where units of product are manufactured in large quantities

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B

Where units of product are manufactured in small quantities

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C

Both (A) and (B)

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D

None of the above

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Solution

The correct option is A Where units of product are manufactured in large quantities
Process costing is the method of costing which is used primarily in those industries where the production passes through multiple stages to reach to the finished product.
Process costing is normally used in big industries where the huge quantity is produced like oil refineries, sugar industries.

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