Chapter 10 - Process Costing

Process Costing is used when identical units are produced through an ongoing series of uniform steps.

• True

• False

A utility such as the water company would typically use a process costing system.

• True

• False

If processing departments are arranged in a parallel manner, all units will go through all departments.

• True

• False

Costing is more difficult in a process costing system that it is in a job-order costing system.

• True

• False

In a process costing system, the cost of production report takes the place of the job cost sheet.

• True

• False

Process and Job-Order Costing are similar in that costs are accumulated (and unit costs are computed) for each separate customer order.

• True

• False

In a process costing system, a Work in Process account is maintained for each department.

• True

• False

It is important to identify labor costs with each customer order in a process costing system.

• True

• False

Operation costing employs aspects of both job-order and process costing systems.

• True

• False

Since costs are accumulated by department, there is no need for a Finished Goods Inventory Account in a process costing system.

• True

• False