In a process costing system,production costs are ________.
A) adjusted and allocated by jobs
B) not reported in Work-in-Process Inventory or Finished Goods Inventory
C) directly shown on the income statement
D) accumulated by process

Question

Quizplus · Accepted Answer

In a process costing system, production costs are accumulated by process, which means that costs are grouped and tracked according to the stage of production they relate to. This allows for the calculation of the cost per unit of output for each process and provides valuable information for management decision-making. The costs are not adjusted and allocated by jobs as in a job costing system, as this would not be practical for large-scale, continuous production processes. The costs are also not directly shown on the income statement, but rather reported in the Work-in-Process Inventory and Finished Goods Inventory accounts.

In a Process Costing System,production Costs Are ________