AccountingPrinciplesProcessCosting幻灯片.pptxVIP

;Learning Objectives;Use to apply costs to similar products that are mass-produced in a continuous fashion. Examples include the production of cereal, paint, manufacturing steel, oil refining and soft drinks. ;Examples of companies that primarily use either a process cost system or a job order cost system.;Which of the following items is not a characteristic of a process cost system: Once production begins, it continues until the finished product emerges. The focus is on continually producing homogenous products. When the finished product emerges, all units have precisely the same amount of materials, labor, and overhead. The products produced are heterogeneous in nature. ;Service companies that provide individualized, non-routine services will probably benefit from using a job order cost system. Those that perform routine, repetitive services will probably be better off with a process cost system.;Job Order Cost Costs assigned to each job. Products have unique characteristics.;Illustration 21-3 Job order cost and process cost flow;SIMILARITIES;Job Order Cost and Process Cost Flow;Accumulation of the cost of materials, labor, and overhead is the same as in job order costing. Debit Raw Materials Inventory for purchases of raw materials. Debit Factory Labor for factory labor incurred. Debit Manufacturing Overhead for overhead cost incurred. Assignment of the three manufacturing cost elements to Work in Process in a process cost system is different from a job order cost system.;A process cost system requires fewer material requisition slips than a job order cost system. Materials are used for processes and not specific jobs. Requisitions are for larger quantities of materials. Journal entry to record materials used:;Time tickets may be used in both systems. All labor costs incurred within a production department are a cost of processing. The journal entry to record factory labor costs: ;Objective of assigning overhead is to allocate overhead to production department