Chapter 4:process cost accounting Flashcards
Describe Process cost accounting
involves mass producing products
- used to apply costs to similar products that are mass produced
How are manufacturing costs applied in process costing
applied on a departmental basis rather than on a job basis
When would a service company use a process costing
repetitive routine tasks
- Mr lube - routine aspects of car care
- H&R block - routine aspects of basic tax practice
- Large Law firm - routine legal services, such as uncomplicated divorces
How job order costing and process costing similar?
1 manufacturing cost elements track dir labour, dir materials and moh
- the accumulation of the costs of material, labour and overhead (use same journal entries)
- the flow of costs
What are the differences between job order and process costing
- the number of WIP accounts used
- Documents used
- the point at which costs are totalled
(job order - when complete, process - at end of period) - unit of cost calculation
job order - total cost/job / units produced
process - total man. cost for the period / the units produced in the period
What is operations costing
combination of process costing and job order costing
- also called a hybrid
- similar to process costing but have customized, individual features that require job order costing
What would the journal entry be to transfer from one WIP department to another
WIP - assembly xx
WIP - machining xx
What are the two method of calculating Equivalent units
- weighted average method
2. FIFO method
what is the document used in process costing
Production cost report for each department
what are the steps in the production cost report
- Calculate physical units
- Calculate equivalent units of production
- Calculate the unit production costs
(material cost, conversion cost, total MAn cost - Prepare a cost reconciliation report
