Which statement is true concerning production cost reports in a process cost system?
A)They are created only for the first processing department.
B)One is created for each processing department.
C)One is created which contains all the processing departments in total.
D)Only companies that use a just-in-time inventory method use production cost reports.

Question

Quizplus · Accepted Answer

Production cost reports are created for each processing department in a process cost system to track the total costs incurred and the units produced in each department. This information is then used to determine the cost per unit and the total cost of production for the entire process. Option A is incorrect because reports are created for each department, not just the first one. Option C is incorrect because a single report for all departments would not provide detailed information on the costs incurred in each department. Option D is incorrect because the use of just-in-time inventory has no bearing on the creation of production cost reports in a process cost system.

Which Statement Is True Concerning Production Cost Reports in a Process