RSM222H1 Chapter Notes - Chapter 5: Cost Driver, Subledger, Sales Order
Document Summary
Process costing a costing system used in those manufacturing situations where a single, homogeneous product flows evenly in a continuous stream out of the production process. Used where the company produces many units of a single product for long periods of time. Each unit is assigned the same average cost because they are undistinguishable. Job order costing system a costing system used in situations where many different products, jobs, or services are produced each period. Since the products are different, the costs are typically different. Requires more effort than a process costing system. Bill of materials a record that lists the type and quantity of each major item of the materials required to make a product. A production order is issued when an agreement has been reached with the customer concerning quantities, prices, and shipment date for the order. Form controls the flow of materials into production and also makes entries in the records.
