ECONOMICS

Detailed explanation-1: -In process costing, the cost per unit in a department is found by spreading the period’s manufacturing costs over the production activity. d. In process costing, the total cost of each unit is found by dividing the total factory costs by the number of units completed.

Detailed explanation-2: -Calculate cost per unit: Divide the total cost by the number of units. This calculation includes both completed units and equivalent units. So, if a business completed 4, 000 products and another 1, 000 units got halfway through production, the applicable costs would be divided by 4, 000 + (1, 000/2) = 4, 500 units.

Detailed explanation-3: -The correct answer is b. A process cost system has one work in process account for each department. Process cost system has multiple departments or processes, so its work in process inventory account has the same number of processes or departments in order to accumulate the product costs incurred for each process.

Detailed explanation-4: -The primary difference between the two costing methods is that a process costing system assigns product costs-direct materials, direct labor, and manufacturing overhead-to each production department (or process) rather than to each job.

Detailed explanation-5: -Materials, labor, and/or manufacturing overhead can be added in any processing department. Transferred in costs are accounting for as direct materials, direct labor and overhead. Units are always 100% complete for transferred in costs.