Asked by Britney Xiong on Jun 03, 2024
Verified
If a company uses a process costing system to account for the costs in its five production departments, how many work in process accounts will it use?
A) 6
B) 5
C) 4
D) 2
Process Costing System
An accounting methodology used to allocate production costs to products based on the process they go through.
Production Departments
These are specialized areas within a manufacturing facility where specific sets of operations or tasks are carried out to produce goods.
- Understand the use of work in process accounts in a process costing system.
Verified Answer
ZK
Zybrea KnightJun 04, 2024
Final Answer :
B
Explanation :
In a process costing system, each department has its own work in process account, but the finished goods account is shared among all the departments. Therefore, a company using a process costing system with five production departments would have five work in process accounts and one finished goods account, for a total of six accounts.
Learning Objectives
- Understand the use of work in process accounts in a process costing system.
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