COST ACCOUNTING
MANUFACTURING OVERHEAD
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Aircrafts at Boeing
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Audit process at Price Waterhouse Coopers
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Movies produced by Universal Studios
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Beverage production by Pepsi
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Detailed explanation-1: -Cost of goods sold is not used in a job-order cost system. B. A process cost accounting system is appropriate for unique products that are produced in batches or jobs.
Detailed explanation-2: -For example, Coca-Cola may use process costing to track its costs to produce its beverages. In job order costing, the company tracks the direct materials, the direct labor, and the manufacturing overhead costs to determine the cost of goods manufactured (COGM).
Detailed explanation-3: -Both the price of the materials needed and the sales price for each of the products of PepsiCo are not similar. The overhead cost of producing each of the products is separately determined. Therefore, going for process costing is not an option.
Detailed explanation-4: -Answer and Explanation: The Coca-Cola Company uses a process cost system in its bottling plants because it manufactures similar kinds of products. This means that the cost of final products is the same. The process cost system also helps track the cost of the company’s beverages during production.