Cost management∶accounting and control 第六章解答手册.doc

CHAPTER 6Product and service costing:a process systems approach questions for writing and discussion 1. A process is a series of activities (operations) that are linked to perform a certain objective. For example, the bottling process of a pain medication manufacturer consists of four linked activities: loading, counting, capping, and packing. 2. Process costing is typically used for companies where units are homogeneous and mass produced. Process costing collects costs by process (department) for a given period of time. Unit costs are computed by dividing these costs by the department’s output measured for the same period of time. Process costing uses multiple work-in-process accounts and uses a cost of production report to summarize the cost and work activity for a department. When work is completed in a department, the cost of the work is transferred to the next department. The final department transfers the work to finished goods. Job-order costing is used for companies that produce heterogeneous products (often custom made). Job-order costing collects costs data by job. Unit costs are computed by dividing the job’s costs by the units produced in the job. Costs and work activity are collected on the job-order cost sheet. When work is completed, it is transferred to finished goods. 3. The work-in-process account of the receiving department is debited, and the work-in-process account of the transferring department is credited. The finished goods account is debited, and the work-in-process account of the final department is credited upon completion of the product. 4. Transferred-in costs are the manufacturing costs transferred from a prior department to the current receiving department. 5. Transferred-in units represent partially completed units and are clearly a material for the receiving department. To complete the product (or further process it), additional direct materials and conversion costs are added by the receiving department. 6. A production report su