Onceproductionbeginsitcontinuesuntilthefinishedproduct

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Unformatted text preview: Which of the following items is not a characteristic of a process cost system: a. Once production begins, it continues until the finished product emerges. b. The focus is on continually producing homogenous products. c. When the finished product emerges, all units have precisely the same amount of materials, labor, and overhead. d. The products produced are heterogeneous in nature. Chapter 21-7 Job Order Cost vs Process Cost Systems Job Order Cost vs Process Cost Systems Job Order Cost Systems Process Cost Systems Costs are assigned to each job. Products have unique characteristics. Chapter 21-8 Costs are tracked through a series of connected manufacturing processes or departments. Products are uniform or relatively homogeneous and produced in a large volume. Job Order Cost vs Process Cost Systems Job Order Cost vs Process Cost Systems Illustration 21-3 Chapter 21-9 Job Order Cost vs Process Cost Systems Job Order Cost vs Process Cost Systems Similarities The accumulation of costs is the same in both systems. Both costing systems track the three manufacturing cost elements: direct materials, direct labor, and manufacturing overhead. Costs are assigned to the same general ledger accounts in both costing systems. However, the methods of assigning the costs differ significantly. Chapter 21-10 Job Order Cost vs Process Cost Systems Job Order Cost vs Process Cost Systems Differences The number of work in process accounts Job Order ­ one work in process account Process ­ multiple work in process accounts Documents used to track costs Job Order ­ job cost sheets Process ­ production cost reports Chapter 21-11 Job Order Cost vs Process Cost Systems Job Order Cost vs Process Cost Systems Differences The point at which costs are totaled Job Order – when job is completed Process ­ at end of period of time Unit cost computation Job Order – total cost per job divided by units in job Process – total manufacturing costs for the period divided by units produced during the period Chapter 21-12 Job...
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