COST ACCOUNTING
PROCESS COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Once production begins, it continues until the finished product emerges
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The products produced are heterogeneous in nature
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The focus is on continually producing homogeneous products
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When the finished product emerges, all units have precisely the same amount of materials, labour and overhead
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Detailed explanation-1: -Process costing is not applicable to heterogeneous products because they are unique products.
Detailed explanation-2: -Answer and Explanation: The correct answer is option b. The system accumulates costs per job. A process cost system is a cost accounting system that is used by the company in ascertaining the cost of producing a product at a particular process or stage of manufacturing.
Detailed explanation-3: -A-The products produced are heterogeneous in nature. This is the correct option because process costing is normally used when the products are HOMOGENEOUS.
Detailed explanation-4: -Which of the following is characteristic of a process costing system? Characteristics of a process costing system include repetitive operations, homogenous products and services, high production volume, low product flexibility, and high standardization.
Detailed explanation-5: -Option D is the correct answer Process cost accounting system is mainly used by manufacturing organizations and therefore, as part of ongoing processes, stock of work in process is only partially completed at the start or end of an accounting period.