Which of the following is true about process costing?
A) Unit costs are computed by job on the job cost sheet
B) The department production report is the key document showing the accumulation and disposition of costs by a department.
C) Costs are accumulated by individual job, regardless of the accounting period during which the work is done.
D) All units of product are different.

Question

Quizplus · Accepted Answer

Process costing is used in industries where identical or similar products are mass-produced, such as in the food, chemical, and pharmaceutical industries. Costs are accumulated by department, and the department production report shows the accumulation and disposition of costs for each department. Option A is incorrect because the unit costs are computed by department, not by job. Option C is incorrect because costs are accumulated by department, not by individual job. Option D is incorrect because process costing is used for products that are identical or similar, so all units of product are the same or very similar.

Which of the Following Is True About Process Costing