Question

Which of the following companies is most likely to use a process costing system?

A. A manufacturer of breakfast cereal
B. A manufacturer of large commercial aircraft
C. A custom jewelry manufacturer
D. A law firm

Answer 1

The manufacturer of breakfast cereal is most likely to use a process costing system.

Step-by-step explanation:

A process costing system is commonly used by companies that produce homogeneous products on a large scale. The manufacturer of breakfast cereal (Choice A) is most likely to use a process costing system. This is because breakfast cereals are usually produced in large quantities using a continuous production process. The cost of producing each unit of cereal can be averaged over the total production volume.