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Which of the following statements is correct regarding job order and process costing systems?

A : Cost of goods sold is not used in a job-order cost system.

B : A process cost accounting system is appropriate for unique products that are produced in batches or jobs.

C : A job-order cost system and a process cost system are two alternative methods for valuing inventories.

D : A job-order cost system is most appropriate when a large volume of uniform products are produced.

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Beverley Smith
Beverley SmithLv2
28 Sep 2019
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Related questions

All of the following statements are true regarding cost accounting systems except

a. A company must use either a job order cost system for all of its products or services or a process cost system for all of its products or services - it cannot use both

b. A company may use a job order cost system for some of its products and a process cost system for other products.

c. Managers use product cost from the cost accounting system for setting product pricing, controlling operations, and developing financial statements.

d. A job order cost system provides product costs for each quantity of product that is manufactured.

 

Identify each statement as true or false. If false, indicate howto correct the statement.

1. Process cost systems are used to apply costs to similarproducts that are mass-produced in a continuous fashion.
2. A process cost system is used when each finished unit isindistinguishable from another.
3. Companies that produce soft drinks, motion pictures, andcomputers chips would all use process cost accounting.
4. In a process cost system, costs are tracked by individualjobs.
5. Job order costing and process costing track differentmanufacturing costs elements.
6. Both job order costing and process costing account for directmaterials, direct labor, and manufacturing overhead.
7. Costs flow through the accounts in the same basic way for bothjob order costing and process costing.
8. In a process cost system, only one work in process account isused.
9. In a process cost system, costs are summarized in a job costsheet.
10. In a process cost system, the unit cost is total manufacturingcosts for the period divided by the units produced during theperiod.

Process Cost Accounting & Cost-Volume-Profit Analysis

This module focuses on measuring costs in process production companies. We explain process production, describe how to assign costs to processes, and compute and analyze cost per equivalent unit. Discuss two of the three topics:

What is meant by equivalent units of production, and why are they important when a process costing system is used?

What are the four steps in accounting for production activity in a period?

Job order costing and process costing are two major costing systems used in manufacturing. Briefly contrast the characteristics of these two systems.

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