MGT 5 Chapter 3: Chapter 3
27 Jul 2017
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Document Summary
Lo 1: discuss the uses of a process cost system. Process cost system : used to apply costs to similar products that are mass-produced in a continuous fashion. Job order cost system assigns costs to a specific job. Similarities : manufacturing cost elements, accumulation of the costs of materials, labor, and. Differences : the number of work in process accounts used, documents used to track costs, the overhead, the flow of costs (methods of assigning cost differ significantly!) point at which costs are totaled, unit cost computations. Lo 2: explain the flow of costs in a process cost system and the journal entries to assign manufacturing costs. Materials costs : generally requires fewer requisitions than in a job order cost system, materials are used for processes rather than for specific jobs. Lo 3: compute equivalent units work in process = equivalent units of production. Weighted-average method : units completed and transferred out + equivalent units in ending.
