Chapter 1TRUE-FALSE QUESTIONS1.Reports prepared in financial accounting are general-purpose reports, whereas reports Show
Get answer to your question and much more 2.Managerial accounting internal reports are prepared more frequently than are classified Get answer to your question and much more 3.Determining the unit cost of manufacturing product is an output of financial accounting. Get answer to your question and much more Get answer to your question and much more Get answer to your question and much more 6.Managerial accounting information generally pertains to an entity as a whole and is Get answer to your question and much more 7.Job order costing system is for allocating costs to group of unique product and isapplicable to the production of customer specified products such as the manufacturing Get answer to your question and much more 8.Process costing is used by companies making one-of-a-kind products. Get answer to your question and much more 9.Operation costing is a hybrid costing system often used in repetitive manufacturing Get answer to your question and much more 10. Cost accounting.procedures help management in gathering the data needed todetermine product costs and thus generate meaningful financial statements and other Get answer to your question and much more Chapter 21.The materials, labor, and overhead costs incurred to produce a product are called period Get answer to your question and much more 2.Marketing, Selling, administrative costs are the three broad classifications of costs Get answer to your question and much more 3.Lumber can be both a finished product and a material. Get answer to your question and much more Get answer to your question and much more 5.Total fixed costs decrease with increase in the number of units produced and increase Get answer to your question and much more Get answer to your question and much more 7.The three cost elements of manufactured goods are direct materials, direct labor, andmarketing costs. Get answer to your question and much more 8.A cost that is present under one alternative but absent in whole or part under anotheralternative is known as a differential cost. Get answer to your question and much more 9.Like product costs, period costs are not necessarily treated as expenses in the period in Get answer to your question and much more Nature of a process cost systemMany businesses produce large quantities of a single product or similar products. Pepsi-Cola makes soft drinks, Exxon Mobil produces oil, and Kellogg Company produces breakfast cereals on a continuous basis over long periods. For these kinds of products, companies do not have separate jobs. Instead, production is an ongoing process. Job costing and process costing have important similarities:
Job costing and process costing systems also have their significant differences:
A process cost system (process costing) accumulates costs incurred to produce a product according to the processes or departments a product goes through on its way to completion. Companies making paint, gasoline, steel, rubber, plastic, and similar products using process costing. In these types of operations, accountants must accumulate costs for each process or department involved in making the product. As an example, view this How's It Made video. Can you imagine having to determine the cost of making just ONE lego when we can make 1.7 million legos per hour? Cost accountants have to do this. They will use process costing! Accountants compute the cost per unit by first accumulating costs for the entire period (usually a month) for each process or department. Second, they divide the accumulated costs by the number of units produced (tons, pounds, gallons, or feet) in that process or department. The next picture shows the cost flows in a process cost system that processes the products in a specified sequential order. That is, the production and processing of products begin in Department A. From Department A, products go to Department B. Department B inputs direct materials and further processes the products. Then Department B transfers the products to Finished Goods Inventory.
There are two methods for using process costs: Weighted Average and FIFO (First In First Out). Each method uses equivalent units and cost per equivalent units but calculates them just a little differently. Under which of the following costing methods an averaging process is used to compute unit product costs?Option b is the correct answer.
The job order costing calculates the unit cost of production in one job by averaging the total cost of the job, and process costing also calculates it by using the average computed by dividing the total cost of production in one process with the total units produced by the process.
How does a job costing system differ from a process costing system?Assignment- In process costing, you first determine the cost of each process, add them up and calculate based on the number of units. On the other hand, job costing calculations are done based on each job. Production- Production is standardized with process costing, while for job costing it's customized.
In what ways are job order and process costing similar quizlet?In what ways are job-order and process costing similar? Job-order costing and process costing have the same basic purpose--assign materials, labor, and overhead cost to products and to provide a mechanism for computing unit product costs. Both systems use the same basic manufacturing accounts.
What is the difference between job costing and process costing quizlet?Process costing is used when a single product is produced on a continuing basis or for a long period of time. Job-order costing is used when many different jobs having different production requirements are worked on each period. Process costing systems accumulate costs by department.
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Both job-order costing and process costing systems utilize averaging concepts in computing unit cost
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