Process costing assigns costs by measuring overall production costs and averaging them based on total production in units over a period of time, usually a month. The resulting average unit costs are then used to determine inventory cost and the cost of goods sold. Let’s look at some companies and see if any of them might be candidates for using a process-costing system.

Log on to the Lands’ End Web site at www.landsend.com. Click on “About Us” on the bottom of the page. What type of firm is Lands’ End? What is its main activity? Do you think that the firm would be a good candidate for using a process-costing system? Why or why not?

2. Log on to La-Z-Boy’s Web site at www.lazboy.com. Click on “About La-Z-Boy.” What type of firm is La-Z-Boy? What is its main activity? Do you think that the firm would be a good candidate for using a process-costing system? Why or why not?

3. Log on to Tasty Baking Company’s Web site at www.tastykake.com. What type of firm is Tasty Baking Company? What is its main activity? Do you think that the firm would be a good candidate for using a process-costing system? Why or why not?