W5chp4-class materials - Chapter Four Systems Design:...

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Unformatted text preview: Chapter Four Systems Design: Process Costing Similarities Between Job-Order and Process Costing Both systems assign material, labor and overhead costs to products and they provide a mechanism for computing unit product cost. Both systems use the same manufacturing accounts, including Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods. The flow of costs through the manufacturing accounts is basically the same in both systems. Both systems assign material, labor and overhead costs to products and they provide a mechanism for computing unit product cost. Both systems use the same manufacturing accounts, including Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods. The flow of costs through the manufacturing accounts is basically the same in both systems. Differences Between Job-Order and Process Costing Process costing is used when a single product is produced on a continuing basis or for a long period of time. Job-order costing is used when many different jobs are worked on each period. Process costing systems accumulate costs by department. Job-order costing systems accumulated costs by individual jobs. Process costing systems compute unit costs by department. Job-order costing systems compute unit costs by job on the job cost sheet. Process costing is used when a single product Process costing is used when a single product is produced on a continuing basis or for a long is produced on a continuing basis or for a long period of time. Job period of time. Job-- order costing is used when order costing is used when many different jobs are worked on each period. many different jobs are worked on each period. Process costing systems accumulate costs by Process costing systems accumulate costs by department. Job department. Job-- order costing systems order costing systems accumulated costs by individual jobs. accumulated costs by individual jobs. Process costing systems compute unit costs by Process costing systems compute unit costs by department. Job department. Job-- order costing systems order costing systems compute unit costs by job on the job cost sheet. compute unit costs by job on the job cost sheet. Process costing is used for products that are: a. Different and produced continuously. b. Similar and produced continuously. c. Individual units produced to customer specifications. d. Purchased from vendors. Process costing is used for products that are: a. Different and produced continuously. b. Similar and produced continuously. c. Individual units produced to customer specifications. d. Purchased from vendors. Quick Check Process costing is used for products that are: a. Different and produced continuously....
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This note was uploaded on 04/18/2011 for the course FINANCE 1001 taught by Professor Lochengshu during the Spring '11 term at National Cheng Kung University.

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W5chp4-class materials - Chapter Four Systems Design:...

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