Discuss under what condition it would be appropriate to use a process costing systems.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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 CNASIA Bhd creates a product that passes through two departments prior to completion: the mixing department and the packaging department. During the month of June, the following information is known about work in the first department, the Mixing Department. The weighted-average approach is used by the company.

  Units Percent Completed
Materials Conversion
Work in process, beginning 70,000 70% 40%
Started into production 460,000    
Completed and transferred out 450,000    
Work in process, ending 80,000 75% 25%
Work in process, beginning   RM36,550 RM13,500
Cost added during the year   RM391,850 RM287,300

 

Discuss under what condition it would be appropriate to use a process costing systems.

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