Q 15E_h - Horngren'S Financial And Managerial Accounting

Question

Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costing.

h. A company that bottles milk into one-gallon containers.

Step-by-Step Solution

Answer

Answer: 

Process costing system is used by the companies that bottles milk into large number of containers.

Step-by-Step Solution:

Step 1: Process  costing system

Process costing system is applicable to the companies which manufacture the product in large quantity and the production process of which involves a series of procedures.

Step 2: Classification of costing system according to the characteristics

The company that bottles the milk into one gallon containers uses the process costing system to value the costing of the process performed by the company. It is so because the company is engaged in the production of similar product in large quantity.