ACC 406 Chapter 5: Chapter 5

48 views7 pages

rosedeer364

7 Feb 2012

School

Department

Course

Professor

For unlimited access to Textbook Notes, a Class+ subscription is required.

Document Summary

this is called a process-costing system y comparison of job-order & process costing on exhibit 5-1 on pg 182. In a job-order firm, collecting costs by job provides vital information for management. Normal costing and overhead application y unit costs r very important cuz managers need accurate cost information on materials, labour & overhead when making decisions. overhead can be estimated by approximating the year s actual overhead at the beg. of the year & then using a predetermined rate throughout the year to obtain the needed unit cost info. almost all firms use normal costing (exhibit 5-2 on pg 184) Importance of unit costs to manufacturing firms y unit costs r important for valuing inventory, determining income & making a # of important decisions y. applied overhead = overhead rate x actual use of the associated activity for the period.

Related Questions

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.

Job order costing is one method of accounting for the costs ofcertain types of manufacturing and service jobs. What type ofmanufacturing and/or service companies would most likely use joborder costing? What type of companies would not use job ordercosting? Explain a situation where a company might use job ordercosting for one product, and another costing method for otherproducts

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.

byzantiumpanda529

ACC 406 Chapter 5: Chapter 5

Document Summary

Get access

Related Documents

ACC 406 Lecture Notes - Lecture 5: Income Statement, Accounts Receivable, Ob River

ACC 406 Lecture Notes - Lecture 1: Petro-Canada, Cost Accounting, Unit Price

ACC 406 Chapter Notes - Chapter 6: Finished Good, European Cooperation In Science And Technology, Unit

Related Questions