Question

Time left 0:54:41 Question 2 Not complete Marked out of 1.00 P Flag question Which of the following are steps in process costing? Select one: A. Visualize the physical flow of units B. Calculate the equivalent units C. Determine the per-unit costs D. Calculate the cost of Goods Manufactured and the Ending WIP Inventory E. All of the above Check

Answer 1

The Answer is

E. All of the Above

In accounting, process costing is a method of assigning production costs to units of output. In process costing systems, production costs are not traced to individual units of output. Costs are assigned first to production departments. Then assign the costs to units of output as they move through the departments. The process costing method is typically used for processes that produce large quantities of homogeneous products

There are five steps in the process costing method. First, analyze the cost-flow model of the relevant inventory account to determine how much inventory was there at the beginning of the period, how much was started during the period, how much as completed during the period, and how much is left as work-in-process at the end of the period.

Second, convert the work-in-process ending inventory into a number of equivalent units produced. This means if there are 1,000 units of inventory in work-in-process, and these units are all 50% complete, then you consider this as the equivalent of 500 units produced (500 = .50 x 1,000).

Third, compute the total direct and indirect costs incurred by the production process that need to be assigned to the units completed and the units still in process. This includes the costs associated with the beginning inventory and the costs incurred during the relevant period.

Fourth, calculate the amount of cost assigned to the completed units of output and the equivalent of completed units of output still in the ending inventory. For example, if a company completed 2,000 units, and left 1,000 units half-finished, then divide the applicable costs by 2,500 units.

Fifth, allocate the relevant costs to the units of product completed and to the units of product remaining in the work-in-process account.

Here in the Question four out of the five steps are included