ACTG 2020 Chapter Notes - Chapter 3: Barcode System, Electronic Data Interchange, Expense
9 Dec 2013
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Product costing is the process of assigning costs to the products and services provided by a company. Absorption costing: all manufacturing costs, fixed and variable, are assigned to units of product. Units are said to fully absorb manufacturing costs: aka full costing. Absorption costing is a popular approach for determining the cost of goods sold and the cost of inventories for financial accounting and income taxes. Process costing system used in situation where co produces many units of a single product (such as frozen orange juice concentrate) for long periods at a time. Examples include mixing cement at st. mary"s cement, refining oil at petro-canada. **homogenous product flows through production process on continuous basis. Unit product cost (per l, kg, etc) = total manufacturing cost/ total units produced (litres, kg, etc: each unit assigned same avg cost. Used where diff products produced each period.
