Accounting Principles Ch 20

Process operations Processing of products in a continuous (sequential) flow of steps; also called process manufacturing or process production.

In a process operation, each process is identified as a separate production department, workstation,or work center.

The cost object in a job order system is the specific job; the cost object in a process costing system is the process.

total costs associated with each process are then divided by the number of units passing through that process to determine the cost per equivalent unit  for that process.

depreciation of a machine used entirely by one process is a direct cost of that process.

The manager of a process usually obtains materials by submitting a materials requisition to the materials storeroom manager. 

In some situations, materials move continuously from raw materials inventory through the manufacturing process. In these cases, materials consumption report , adocument that summarizes the materials a department uses during a reporting period; replaces materials requisitions, is used.

 In a process operation, the direct labor of a production department includes all labor used exclusively by that department. This is the case even if the labor is not applied to the product itself. If a production department in a process operation, for instance, has a full-time manager and a full-time maintenance worker, their salaries are direct labor costs of that process and are not factory overhead.

A department’s indirect labor cost might include an allocated portion of the salary of a manager who supervises two or more departments.

indirect labor costs. These employees provide clerical, maintenance, and other services- order materials, deliver them to the factory floor, repair equipment, operate and program computers used in production, keep payroll and other production records, clean up, and move the finished goods to the warehouse.

The time it takes to process (cycle) products through a process is...