Final answer:
The acceptable assumption in process costing is that there is a one-to-one relationship between output measures of transferring and receiving departments. Accurate cost calculation is critical and influenced by several factors, such as economies of scale where cost per unit decreases with increased output.
Step-by-step explanation:
The assumption made under the process-costing method that is commonly accepted is b. There is a one-to-one relationship between the output measures of a transferring department and a receiving department. This assumption means that the output from one department is equal in measure and transferred at the same cost to the next department. Process costing is used when a continuous production process results in identical or highly similar products and when costs are to be assigned to units of product.
When dealing with calculating the appropriate cost of production, there can be challenges such as determining the portion of overheads to allocate, especially in complex environments like controlled economies or large-scale production where issues such as economies of scale come into play. In large operations, as the quantity of output goes up, the cost per unit often goes down, which aligns with the principle of economies of scale. Therefore, understanding the intricacies of the costing method is pivotal in ensuring accurate product cost representation.