Ch 6: Process Cost System in Accounting

About This Chapter

In this chapter, get acquainted with the process cost system in accounting. Our self-paced study materials can be accessed online around the clock, putting you in charge of how fast you learn accounting vocabulary words, formulas, analyses, processes, and related problem-solving strategies.

Process Cost System in Accounting - Chapter Summary

In most organizations, expenses and incoming cash move in and out of all departments, and accounting for all of these different flows of money can prove difficult without a proper system. This chapter discusses the process cost system in accounting, including a look at how that system works, which costs are inputted, and which methodologies prove most effective. Our well-organized lessons use easy-to-understand headers to indicate major topics within each lesson. All of the important terminology, definitions, and formulas are also distinguished through the use of bold and italicized lettering. Visual aids are also included in the lessons to further explain major topics. After you complete the chapter, you will be able to do the following:

  • Assess how the process cost system can be used for processing expenses
  • Summarize how to input journal entries for cost of goods sold
  • Critique the main factors driving overhead costs in manufacturing
  • Establish the formula for equivalent units and the weighted-average method
  • Generalize how to find equivalent units using the FIFO inventory method
  • Show the steps for prepping and analyzing a production cost report

7 Lessons in Chapter 6: Process Cost System in Accounting
Test your knowledge with a 30-question chapter practice test
Processing Expenses with the Process Cost System

1. Processing Expenses with the Process Cost System

This lesson will review the process costing system and discuss how manufacturing companies track the flow of expenses through departments involved with the manufacturing process.

Cost of Goods Sold Journal Entries

2. Cost of Goods Sold Journal Entries

In this lesson, you'll learn more about cost of goods sold and how to properly write down your cost of goods sold and then transfer it into the right job order entry so your financial records are accurate.

Drivers of Manufacturing Overhead Costs

3. Drivers of Manufacturing Overhead Costs

Cost drivers are those factors that cause costs to change. In this lesson, we look at various cost drivers for manufacturing overhead, both for firms that manufacture products and those that create services.

Equivalent Units & the Weighted-Average Method Formula

4. Equivalent Units & the Weighted-Average Method Formula

This lesson introduces the topic of equivalent units and demonstrates how to calculate this number. It also calculates per unit cost of production and illustrates a production cost report and the way in which the corresponding numbers are used by management.

FIFO Inventory Method of Finding Equivalent Units

5. FIFO Inventory Method of Finding Equivalent Units

In this lesson, you will be learning about the FIFO inventory method of finding equivalent units. You will learn how to find equivalent units using the FIFO inventory method and be able to use this measure to create a production cost report.

Preparing a Production Cost Report

6. Preparing a Production Cost Report

A Production Cost Report, sometimes called a Cost of Production Report, allows accountants to follow the flow of raw materials through a company's departments. In this lesson, we will learn how to prepare one.

Analyzing a Production Cost Report

7. Analyzing a Production Cost Report

When you first see one, a production cost report can be a rather intimidating piece of work. Luckily, this lesson shows how to analyze the information in such a report to not only track inventory and costs, but also efficiency.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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