{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter_21_LO_4,5,6,7 - Chapter 21(continued LO 4,5,6,7 The...

Info iconThis preview shows pages 1–15. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 21 (continued ) LO 4,5,6,7
Background image of page 1

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

View Full Document Right Arrow Icon
The Process Costing System Objective 4 Explain product flow and cost flow in a process costing system
Background image of page 2
The Process Costing System Used by companies that Produce large amounts of similar products or liquid products Have long, continuous production runs of identical products Tracking costs to individual products in a continuous flow environment would be too difficult and too expensive Also, would not result in significantly different product costs
Background image of page 3

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

View Full Document Right Arrow Icon
The Process Costing System (cont’d) Because products are alike, they should cost the same to produce A process costing system accumulates costs and assigns them to products as they are produced during a particular period
Background image of page 4
Patterns of Product Flows and Cost Flows When using process costing, the steps in processing can be combined in hundreds of different ways Two basic production flows 1. The completed product from one department becomes the direct materials for the next department 2. Two separate products are each developed in their own department and then joined with a third direct material in another department
Background image of page 5

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

View Full Document Right Arrow Icon
Production Flows for Process Costing
Background image of page 6
Patterns of Product Flows and Cost Flows Steps describing the production flow during the manufacture of computer chips 1. Producing the silicon wafer 2. Fabricating the chips 3. Final testing, assembly, and packaging of chips
Background image of page 7

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

View Full Document Right Arrow Icon
Product Flows in a Process Costing System for Computer Chip Making
Background image of page 8
Patterns of Product Flows and Cost Flows Costs are accumulated as the product passes through each manufacturing process, department, or work cell and passed on to the next manufacturing process, department, or work cell At the end of every accounting period, the system generates a process cost report
Background image of page 9

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

View Full Document Right Arrow Icon
Process Cost Report Assigns the costs that have accumulated during the period to the units that Have transferred out of the process, department, or work cell Are still work in process Used to assign costs using the FIFO costing method
Background image of page 10
FIFO Costing Method Cost flow follows the logical physical flow of production Costs assigned to first materials processed are the first costs transferred out when the materials flow to the next process, department, or work cell
Background image of page 11

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

View Full Document Right Arrow Icon
Cost Flows Through the Work in Process Inventory Accounts Work in Process Inventory accounts are the focal point of process costing As products flow through the Work in Process Inventory account s for each process, department, or work cell, the costs associated with them flow to the Work in Process Inventory account of that process, department, or work cell.
Background image of page 12
Cost Flows Through the Work in Process Inventory Accounts (cont’d) Costs of cookie dough accumulate Cookie dough is prepared Mixing Department Cookie dough is prepared in the Mixing Department, where the costs of direct materials, direct labor, and manufacturing overhead incurred accumulate
Background image of page 13

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

View Full Document Right Arrow Icon
Cost Flows Through the Work in Process Inventory Accounts (cont’d) Costs of cookie dough
Background image of page 14
Image of page 15
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}