Q2RQ
Question
Question: What types of companies use process costing systems?
Step-by-Step Solution
Verified Answer
Answer:
The companies that produce the goods in large quantity or are engaged in producing similar products, use the process costing system.
1Step 1: Cost of production
The cost of production means the total cost incurred by the company while manufacturing the products. It includes all the direct or indirect cost incurred.
2Step 2: Process costing system
The companies which are manufacturing the same product in large number of quantity should use process costing system. It is so because the company have to calculate the cost at different process of production.
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