FAQ Topic 7&8

Process cost accounting focuses on the process involved in mass-producing products that are very similar in nature.

• True

• False

A job order cost system identifies costs with a particular job rather than with a set time period.

• True

• False

The assignment of the three manufacturing cost elements to Work in Process in a process cost system is the same as in a job order cost system.

• True

• False

There should be a separate job cost sheet for each job.

• True

• False

One similarity of process cost accounting with job order cost accounting is that both determine total manufacturing costs after each job.

• True

• False

A process cost system would most likely be used by a company that makes

• motion pictures

• repairs to automobiles

• breakfast cereal

• college graduation announcements

Differences between a job order cost system and a process cost system include all of the following except the

• documents used to track costs

• point at which costs are totaled

• unit cost computations

• flow of costs

In a process cost system,

• a Work in Process account is maintained for each product.

• a materials requisition must identify the job on which the materials will be used.

• a Work in Process account is maintained for each process.

• one Work in Process account is maintained for all the processes, similar to a job order cost system

An important feature of a job order cost system is that each job

• must be similar to previous jobs completed

• has its own distinguishing characteristics

• must be completed before a new job is accepted

• consists of one unit of output

The job cost sheet does not show

• costs chargeable to a specific job

• the total costs of a completed job

• the unit cost of a completed job

• the cost of goods sold