Final answer:
Process costing is used in the pharmaceutical and semiconductor industries to calculate the cost of producing large quantities of identical or similar products efficiently.
Step-by-step explanation:
Process costing is a method used by industries to calculate the cost of producing large quantities of identical or similar products. It is most commonly used in industries where products go through multiple stages of production and each unit is identical.
In the pharmaceutical industry, process costing is used to determine the cost of manufacturing drugs. Pharmaceutical companies produce large quantities of drugs using a standardized process, making process costing an efficient method of cost allocation.
In the semiconductor industry, process costing is used to determine the cost of manufacturing semiconductors. The production of semiconductors involves multiple stages, including wafer fabrication and assembly, where large quantities of identical or similar products are produced.