Exam 5: Process Costing and Cost Allocation

Managerial accountants treat partially-assembled units the same as a fully-assembled units.

The managers at Anderson's Roofing Company use five steps in their process-costing system.List the five steps the managers use in their system and discuss the significance of each step to a managerial accountant.

Sally is an accounting student at the state college.On her exam,she is asked to define the operation-costing system and explain when she should use the method of job-costing versus the method of process-costing.How should Sally respond to the test question?

Managerial accountants compute the budgeted cost per unit (standard input cost)to develop a budgeted cost per output unit (standard cost of output).

The primary reason managers are interested in joint-cost allocation is to calculate the cost of goods sold and inventory values for individual products.

Process-costing systems separate costs into cost categories according to when costs are introduced into the process.