In a process costing system,unit cost is computed
A)on the basis of productive output for a period of time.
B)for each job worked on.
C)for direct materials costs only.
D)only for the last production process.

Question

Quizplus · Accepted Answer

In a process costing system, unit cost is computed on the basis of productive output for a period of time. This means that the total cost of the production process is divided by the total units produced during that period to calculate the unit cost. This method is used for products that are mass-produced in a continuous flow process, such as petroleum, chemicals, and food products. Each unit produced is assumed to have the same cost, regardless of the actual materials and labor used in its production. Therefore, the unit cost is calculated by dividing the total cost of production by the total number of units produced.

In a Process Costing System,unit Cost Is Computed