A company that applies process costing is most frequently characterized by: Multiple Choice

- Low standardization and high production volume.

- Repetitive production and low production volume.

- Repetitive production and unique products.

- Similar products and high production volume.

- Custom orders and mass production.

The correct answer is - Similar products and high production volume.

Explanation:

A process costing system is used to compute the costs of a product for a mass or a current production system. Product costs can be determined by adding the average unit costs for each operation periodically, to measure benefits and inventory valuation it is necessary to assess the work in progress (WIP), which has accumulated for each sequence of activities. At each stage of the WIP production process it can be valued by conversion into equivalent units and applying the average cost per unit of product to the operation.

In the process of industrial production costs, it moves from one process to another until the final termination occurs, each production department performs some part of the total operation and transfers its completed production to the next department, where it becomes the input for processing additional. The finished production of the last department is transferred to the inventory of finished products.