42 - Chapter4 SystemsDesign:ProcessCosting 42 1...

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Chapter 4 Systems Design: Process Costing Solutions to Questions 4-1  A process costing system should be   used in situations where a homogeneous product is  produced on a continuous basis. 4-2 1. Job-order costing and process costing have the same basic purposes—to assign materials,  labor, and overhead cost to products and to provide a mechanism for computing unit product  costs.  2. Both systems use the same basic manufacturing accounts.  3. Costs flow through the accounts in basically the same way in both systems.  4-3  Cost accumulation is simpler under   process costing because costs only need to be assigned  to departments—not separate jobs. A company usually has a small number of processing  departments, whereas a job-order costing system often must keep track of the costs of  hundreds or even thousands of jobs.
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