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Which of the following would occur in a production environment where process costing is used?
(1) Continuous production process
(2) Output of one process may become the input of the next process
(3) Output is always a single product(A) 1 and 2 only
(B) 1 and 3
(C) 1, 2 and 3
(D) 3 onlySir answer is A. I still wonder why third statement is wrong. Please help me out.
For a production run the output will always be a single product. Eg one day red paint is made; the next blue paint and the production line will have to be cleansed an set-up between each run.
Obviously, for a paint company different products can be made over time, but for each run the output units will be identical.
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