Chapter 4

Chapter 4 - Chapter Four: Cost Flows in Process Costing...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter Four: Cost Flows in Process Costing Process Costing – commonly used in industries that produce essentially homogenous products on a continuous basis. Comparison of Job Order and Process Costing o Similarities between Job-Order and Process Costing Both systems have same basic purpose – assign material, labor, and manufacturing overhead costs to products and to provide a mechanism for computing unit product costs. Use same basic manufacturing accounts – Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods. Flow of costs through manufacturing accounts is basically the same in both systems. o Differences between Job-Order and Process Costing Process costing is used when a company produces continuous flow of units that are indistinguishable from one another. Job order costing is used when a company produces many different jobs that have unique production requirements. Under process costing, it makes no sense to try to identify materials, labor, and overhead costs with particular customer orders. Process costing accumulates costs by department and assigns these costs uniformly to all units that pass through the department during a period. Process costing focuses on departments, job cost sheets are not
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/18/2008 for the course ACCT 202 taught by Professor Steedle during the Spring '07 term at Towson.

Page1 / 3

Chapter 4 - Chapter Four: Cost Flows in Process Costing...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online