Company N manufactures machines to customer order. Why would the use of a process costing system not be appropriate for N?
What will be an ideal response?
Answers will vary.
A process costing system is useful for a company with homogeneous production, where the same product is made for long periods of time. For such products, it assigns an average cost per unit. N needs a cost system that can keep track of the cost for each job because the jobs differ from each other. N should use job-order costing.
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