ECONOMICS

Detailed explanation-1: -Both job order and process cost accounting use equivalent units of production to determine costs. False. If 16, 000 units of materials enter production the first year of operations, 12, 000 of the units are finished, and 4, 000 are 75% completed, the number of equivalent units of production would be 15, 000.

Detailed explanation-2: -Your business can use job order costing and process costing to track production costs and allocate expenses, such as time, materials and labor, to your products, and both use about the same information to calculate unit cost.

Detailed explanation-3: -Process costing and job order costing are both acceptable methods for tracking costs and production levels. Some companies use a single method, while some companies use both, which creates a hybrid costing system. The system a company uses depends on the nature of the product the company manufactures.

Detailed explanation-4: -Job costing is used for very small production runs, and process costing is used for large production runs.

Detailed explanation-5: -Question: In a process cost accounting system, a separate Work in Process Inventory account is maintained for each producing department. a. True.