About This Chapter
Process Cost System- Chapter Summary and Learning Objectives
Process costing is an important tool in mass production. Managers should evaluate when and how it should be used. This chapter is designed to teach you about process costing. The instructors featured in this lesson use engaging lessons to develop topics like production cost reports. The quizzes located in these lessons will help you measure your progress as you move through the chapter. These lessons include information like:
- The definition of process costing
- How process costing compares to job order costing
- Managing the process cost system
- The drivers of manufacturing overhead
- Methods for inventory valuation
- The steps to preparing a production cost report
|Process Costing: Definition & Examples||Assess the components of the process cost system and when it is used.|
|Process Costing vs. Job Order Costing||Compare process costing to job order costing|
|Processing Expenses with the Process Cost System||Analyze how to create a journal entry assigning costs from one department to next assembly.|
|Cost of Goods Sold Journal Entries||Deduce how to develop journal entries moving costs between departments.|
|Drivers of Manufacturing Overhead Costs||Classify the driver of overhead costs and how it can be determined.|
|Inventory Valuation Methods: Specific Identification, FIFO, LIFO & Weighted Average||Explain how to calculate inventory in a perpetual system using different methods.|
|Equivalent Units & the Weighted-Average Method Formula||Evaluate the equivalent units of production and their importance.|
|FIFO Inventory Method of Finding Equivalent Units||Illustrate how the FIFO inventory method can be used to find equivalent units.|
|Preparing a Production Cost Report||Explain the four steps of developing a production cost report.|
|Analyzing a Production Cost Report||Assess the production cost report by explaining who uses the report and how the data is collected.|
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.
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.
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.
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.
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.
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.
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.
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Other chapters within the Accounting 301: Applied Managerial Accounting course
- Corporate Governance for Managerial Accounting
- Financial Statements & Balance Sheets
- Cost Classifications
- Manufacturing Overhead Cost Allocation
- Job Order Cost System
- Activity-Based Costing
- Cost-Volume-Profit Analysis
- Decision Making in Managerial Accounting
- Pricing Objectives & Methods
- Budgetary Control
- Standard Costs
- Capital Budgeting
- Statement of Cash Flows
- Financial Statement Analysis
- Software for Managerial Accounting
- Required Assignments for Accounting 301
- Studying for Accounting 301