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Which method of costing is used for products requiring continuous production, such as sugar or chemicals?
AJob costing
BBatch costing
CContract costing
DProcess costing
Answer & Solution
Correct answer: D. Process costing
1. In continuous production, output of one process becomes input of the next.
2. Process costing accumulates cost per process and divides by units to get per-unit cost.
3. Sugar, edible oil, and chemicals are listed as process-costing industries.
_Source: ICMAI BoS CMA Foundation Paper 2 (Cost Accounting), Module 4 §4.1-4.2 (Methods & Systems of Costing), p. 297-308_
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