Process Cost Systems - moves the bottles into position and...

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The Nature of Process Cost Systems USES OF PROCESS COST SYSTEMS Companies use  process cost systems  to apply costs to similar products that are mass-produced in a  continuous fashion.   uses a process cost system: Production of the ice cream, once it  begins, continues until the ice cream emerges, and the processing is the same for the entire run—with  precisely the same amount of materials, labor, and overhead. Each finished pint of ice cream is  indistinguishable from another. A company such as  USX  uses process costing in the manufacturing of steel.  Kellogg  and  General  Mills  use process costing for cereal production;  ExxonMobil  uses process costing for its oil refining.  Sherwin Williams  uses process costing for its paint products. At a bottling company like  Coca-Cola the manufacturing process begins with the blending of ingredients. Next, automated machinery 
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Unformatted text preview: moves the bottles into position and fills them. The production process then caps, packages, and forwards the bottles to the finished goods warehouse. Illustration 16-1 shows this process. Illustration 16-1 Manufacturing processes For Coca-Cola, as well as the other companies just mentioned, once the production begins, it continues until the finished product emerges, and each unit of finished product is like every other unit. In comparison, in a job order cost system companies assign costs to a specific job . Examples are the construction of a customized home, the making of a motion picture, or the manufacturing of a specialized machine. Illustration 16-2 provides examples of companies that primarily use either a process cost system or a job order cost system. Process cost and job order cost companies and products...
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 202 taught by Professor - during the Fall '11 term at Montgomery.

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Process Cost Systems - moves the bottles into position and...

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