Concept explainers
Give three examples of industries that use process-costing systems.
To identify: The examples of industries that use process-costing systems.
Explanation of Solution
Process Costing:
Process costing is a tool used to ascertain the cost incurred by the business at each level of production. It is also used as a cost control technique.
Explanation:
Examples of industries that use process-costing systems are:
- Chemical processing.
- Food production.
- Oil refining.
- Plastics
- Brick and tile manufacturing.
- Process cost system is used by the businesses which produce homogeneous goods like bricks manufacturer.
- It is beneficial for the businesses where mass production is done through a similar process.
Hence, the chemical processing, food production and oil refining are some examples of industries that use process-costing systems.
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