The third step in process costing system is to ____________?
Correct answer: C. summarize total costs
- A. summarize flow of output
- B. compute output in units
- C. summarize total costs
- D. compute cost for each equivalent unit
Explanation
The usual process-costing sequence is to trace physical flow, calculate equivalent units, summarize total costs, compute cost per equivalent unit, and assign costs. Therefore, summarizing total costs is the third 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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