
Concept explainers
Concept introduction:
The flow of cost refers to the steps taken by costing system to assign the different types of costs to the product or process. Under the process costing system the cost flows through following steps:
• Direct Material: In the first step of the cost flow, the direct material is taken out from the material inventory and used in the production.
• Direct Labor: Direct labor is the labor used in the production process that is directly allocable to the product.
• Manufacturing
Requirement-1:
To identify: The number of raw materials used to make cheese pizza and use of these material in making the pizza.
Requirement-2:
To identify: The differences in use of raw material by a local pizza store and a national pizza chain in making the pizza
Requirement-3:
To determine: The profitable business in comparing the local pizza store with a national pizza chain

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Chapter 23 Solutions
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