Chapter 17 - Process costing. This chapter’s objectives are to: Discuss the uses of a process cost system and how it compares to a job order system, explain the flow of costs in a process cost system and the journal entries to assign manufacturing costs, Compute equivalent units. | Process Costing 17 Learning Objectives Discuss the uses of a process cost system and how it compares to a job order system. 1 Explain the flow of costs in a process cost system and the journal entries to assign manufacturing costs. 2 Compute equivalent units. 3 Complete the four steps to prepare a production cost report. 4 Use to apply costs to similar products that are mass-produced in a continuous fashion. Examples include the production of Cereal, Paint, Manufacturing Steel, Oil Refining and Soft Drinks. Uses of Process Cost Systems LEARNING OBJECTIVE Discuss the uses of a process cost system and how it compares to a job order system. 1 Illustration 17-1 Manufacturing processes LO 1 Examples of companies that primarily use either a process cost system or a job order cost system. Use of Process Cost Systems Illustration 17-2 Process cost and job order cost companies and products LO 1 Which of the following items is not a characteristic of a process cost system: Once production begins, it continues until the finished product emerges. The focus is on continually producing homogenous products. When the finished product emerges, all units have precisely the same amount of materials, labor, and overhead. The products produced are heterogeneous in nature. Question Use of Process Cost Systems LO 1 Service companies that provide individualized, non-routine services will probably benefit from using a job order cost system. Those that perform routine, repetitive services will probably be better off with a process cost system. Process Cost for Service Companies LO 1 Job Order Cost Costs assigned to each job. Products have unique characteristics. Process Cost Costs tracked through a series of connected manufacturing processes or departments. Products are uniform or relatively homogeneous and produced in a large volume. Similarities and Differences Between Job Order Cost and Process Cost Systems LO 1 Illustration 17-3 Job order cost and process cost flow Job Order Cost and . | Process Costing 17 Learning Objectives Discuss the uses of a process cost system and how it compares to a job order system. 1 Explain the flow of costs in a process cost system and the journal entries to assign manufacturing costs. 2 Compute equivalent units. 3 Complete the four steps to prepare a production cost report. 4 Use to apply costs to similar products that are mass-produced in a continuous fashion. Examples include the production of Cereal, Paint, Manufacturing Steel, Oil Refining and Soft Drinks. Uses of Process Cost Systems LEARNING OBJECTIVE Discuss the uses of a process cost system and how it compares to a job order system. 1 Illustration 17-1 Manufacturing processes LO 1 Examples of companies that primarily use either a process cost system or a job order cost system. Use of Process Cost Systems Illustration 17-2 Process cost and job order cost companies and products LO 1 Which of the following items is not a characteristic of a process cost system: Once production .
