f) 'Process costing is a term used in cost accounting to describe method for collecting and assigning one manufacturing costs to the units produced.' There are some statements about the process costing: 1. An abnormal loss occurs when expected output exceeds actual output. 2. The scrap value of an abnormal loss is credited to the process account. 3. The allocated cost of an abnormal gain is credited to the process account. 4. The inputs to a process less the normal loss is the expected output. 5. The normal loss in a process is allocated a cost in order to reconcile the costs of inputs and outputs. 6. The FIFO method assumes opening WIP is the first group of units to be completed. Therefore, opening WIP is charged separately to completed production and CPU is based on current period costs. Required: Please identify which of the above statements are false and explain the reasons.

f) 'Process costing is a term used in cost accounting to describe method for collecting and assigning one manufacturing costs to the units produced.' There are some statements about the process costing: 1. An abnormal loss occurs when expected output exceeds actual output. 2. The scrap value of an abnormal loss is credited to the process account. 3. The allocated cost of an abnormal gain is credited to the process account. 4. The inputs to a process less the normal loss is the expected output. 5. The normal loss in a process is allocated a cost in order to reconcile the costs of inputs and outputs. 6. The FIFO method assumes opening WIP is the first group of units to be completed. Therefore, opening WIP is charged separately to completed production and CPU is based on current period costs. Required: Please identify which of the above statements are false and explain the reasons.

Name: f) 'Process costing is a term used in cost accounting todescribemetho
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Description: f) 'Process costing is a term used in cost accounting todescribemethod for collectingandassigningonemanufacturing costs to the units produced.' There are somestatements about the process costing:1. An abnormal loss occurs when expected output exceed

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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All the following statements about process costing is correct, EXCEPT: O a. Process costing allocates applied manufacturing overhead cost to product cost. O b. Process costing uses the manufacturing accounts, including Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods. O c. All the given answers are correct. O d. Process costing assigns direct materials cost, direct labor cost, and manufacturing overhead costs to products to compute product cost per unit. O e. Process costing is normally used by companies which constructs houses.
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