Which of the following statements is true?
A)The Work in Process Inventory account is the focal point of process costing.
B)Labor costs are accounted for differently from overhead costs in a process costing system.
C)Equivalent units usually are computed for direct materials and overhead combined.
D)A process cost report should be prepared only if the average costing method is used.

Question

Quizplus · Accepted Answer

The Work in Process Inventory account is indeed the focal point of process costing, as it represents the current status of partially completed goods in the production process. B is incorrect because labor costs and overhead costs are typically combined and accounted for together in a process costing system. C is incorrect because equivalent units are typically calculated separately for direct materials and conversion costs (which include both direct labor and overhead). D is incorrect because a process cost report can be prepared with any costing method, although the specific information presented may differ depending on the method used.

Which of the Following Statements Is True