ECONOMICS

Detailed explanation-1: -Costs are assigned to each specific job in a process cost system. In a process cost system, total costs are determined at the end of a period of time, such as a month. In a process cost system, the unit cost is total manufacturing costs divided by the equivalent units produced during the period.

Detailed explanation-2: -How is process costing calculated? Product costs are allocated to the departments or processes each item passes through over a set period, instead of tracing costs to individual items produced. The total process cost is divided by the total number of items, resulting in an average cost for each item.

Detailed explanation-3: -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.

Detailed explanation-4: -THE 5 STEPS FOR PROCESS COSTING Analyze the flow of actual units. Convert the inventory to determine the equivalent units. Identify the total costs. Calculate the average cost per equivalent unit.

Detailed explanation-5: -Add the cost of beginning inventory to the cost of purchases during the period. This is the cost of goods available for sale. Multiply the gross profit percentage by sales to find the estimated cost of goods sold. Subtract the cost of goods available for sold from the cost of goods sold to get the ending inventory.