For which of the following businesses would a process cost system be most appropriate?

• A. A company manufacturing identical cans of paint in large batches
• B. A law firm providing customized legal services
• C. A jewelry store selling individual, unique items
• D. A custom furniture workshop making unique pieces

Answer: (A)

Verified step by step guidance

1. Understand the concept of a process cost system: A process cost system is used in industries where production is continuous, and the products are homogeneous (identical). Costs are accumulated for each process or department, and then averaged over the units produced.
2. Analyze the characteristics of each business option provided in the problem: Determine whether the business involves homogeneous production or customized, unique items.
3. Evaluate the company manufacturing identical cans of paint in large batches: This business involves continuous production of identical products, which aligns with the characteristics of a process cost system.
4. Consider the law firm providing customized legal services: This business involves unique, customized services for each client, which is better suited for a job order cost system rather than a process cost system.
5. Assess the jewelry store and custom furniture workshop: Both involve unique, individual items or pieces, which are also better suited for a job order cost system rather than a process cost system.