A key feature in process costing is that
A)total costs are divided by total equivalent units.
B)total units are multiplied by total costs.
C)(total costs times percentage allocated to each unit)are divided by total units.
D)(total units multiplied by the percentage allocated to each unit)is multiplied by total costs.
E)total units are multiplied by individual costs.

Question

Quizplus · Accepted Answer

In process costing, the total costs incurred in a production process are divided by the total equivalent units to determine the cost per unit of production. This method assumes that all units produced are identical and that costs are spread evenly across all units. Thus, the total costs are allocated based on the total equivalent units rather than individual units or percentage allocations.

A Key Feature in Process Costing Is That