GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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bricklaying firms
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transport firms
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hospitals
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oil refining firms
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Detailed explanation-1: -Explanation: Process costing is appropriate for oil refining businesses. Process costing is suitable for companies that produce homogeneous products and continuous production.
Detailed explanation-2: -Process costing is an important product costing method for manufacturing companies that mass produce a large volume of similar products or units of output. Process costing is widely used in industries such as oil refining, food production, chemical processing, textiles, glass, cement and paint manufacture.
Detailed explanation-3: -Process costing is suitable for oil refining firms. Process costing is suitable for industries that produce homogeneous products.
Detailed explanation-4: -In such cases, process costing is used. In case of refinery, there are various processes involved, hence process costing is involved.
Detailed explanation-5: -The correct answer is option C. an accounting firm, B. a law firm, and D. a construction company are all incorrect. Service firms, in general, use a job order cost system rather than a process cost system.