ECONOMICS

Detailed explanation-1: -Each department adds direct labor and manufacturing overhead costs, plus the cost of any raw materials it uses. Companies may use separate work-in-process inventory accounts for each department or stage in the process.

Detailed explanation-2: -A separate Work in Process account is maintained for each processing department. Material, labor, and overhead costs transferred from one department’s Work in Process account to another department’s Work in Process account are called transferred-in costs. The flow of raw material costs.

Detailed explanation-3: -In process costing, a separate Work in Process account is maintained for each processing department. Instead of using a job cost sheet, production reports are prepared for each department (or process) to accumulate costs of production and to account for units worked on.

Detailed explanation-4: -Process costing is a costing method or an operational type of costing in which a manufacturer tracks the cost of production of a sequence of continuous or repetitive processes required to produce a product.

Detailed explanation-5: -A separate Work in Process Inventory account is used in process costing for each major production process. Process costing often combines direct materials and direct labor into a single category called conversion costs.