The forth step in process costing system is to __________?
Correct answer: B. compute cost for each equivalent unit
- A. summarize total costs
- B. compute cost for each equivalent unit
- C. summarize flow of output
- D. compute output in unitsGet Executive Coaching
Explanation
After summarizing output, computing equivalent units, and summarizing total costs, the fourth step is to compute the cost per equivalent unit. This cost is then used in the final allocation step.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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