A company that produces motion pictures would likely use a process cost system

In a process costing system, costs are tracked through a series of connected manufacturing processes or departments, rather than by individual jobs.

In a process cost system, materials, labor and overhead are only added in the first production department.

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.

Equivalent units of production are used to determine the cost per unit of completed products.

Equivalent units of production is the sum of units completed and transferred out plus equivalent units of beginning work in process.

The first step performed in preparing a production cost report is computing the equivalent units of production.

The physical units in a department are another name for the equivalent units of production.

Unit material cost is computed by taking total material costs charged to the department for the period and dividing by the physical units in the process during the period.

The total manufacturing cost per unit is used in costing the units completed and transferred during the period.

A production cost report is an internal document for management that shows production quantity and cost data for a particular job.

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

The flow of costs in a process costing system requires that materials be added in one department, labor added in another department and manufacturing overhead in a third department.

When finished goods are sold, the entry to record the cost of goods sold is a debit to Finished Goods Inventory and a credit to Cost of Goods Sold.

When there is no beginning work in process and materials are entered at the beginning of the process, equivalent units of materials are the same as the units started into production.

Process costing works well whenever relatively homogeneous products pass through a series of processes and receive similar amounts of manufacturing costs.

Partially completed units can be worked on simultaneously in different processes and then brought together in a final process for completion.

Equivalent units of output are the partially completed units that could have been produced given the total amount of manufacturing effort expended for the period under consideration.

Cost information is the only section included in the production report.