Which statement regarding process costing is TRUE?
A)Process-costing systems are usually simpler than job-order costing systems.
B)Individual jobs exist in process costing.
C)The unit cost for process costing is found by accumulating the costs for all the manufacturing departments and dividing the total by the number of units produced.
D)The process-costing approach does not distinguish between individual units of product.

Question

Quizplus · Accepted Answer

The process-costing approach does not distinguish between individual units of product, instead it calculates the average cost of all units produced during a particular time period. Option A is false because process costing can be more complex than job-order costing based on the number of processes and cost centers involved. Option B is false because process costing deals with identical units of products. Option C is also false because the cost of each department is separately calculated and then added together to get the total cost of production.

Which Statement Regarding Process Costing Is TRUE