Indicate whether each of the following statements is true or false.

  1. A law firm is likely to use process costing for major lawsuits.
  2. A manufacturer of paintballs is likely to use process costing.
  3. Both job order and process costing determine product costs at the end of a period of time, rather than when a product is completed.
  4. Process costing does not keep track of manufacturing overhead.

Use job order costing in situations where unit costs are high, unit volume is low, and products are unique.

Use process costing when there is a large volume of relatively homogeneous products.