Which of the following statements is TRUE of process costing?
A) It uses one Work-in-Process Inventory account.
B) It tracks and assigns both period costs and product costs to units produced.
C) It accumulates product costs by production departments.
D) It assigns manufacturing overhead costs to products only in the last production process.

Question

Quizplus · Accepted Answer

Process costing accumulates product costs by production department, by dividing the production process into separate production departments. Each department adds value to the product and incurs its own departmental costs, which are used to calculate the cost per unit of product. Process costing also uses multiple Work-in-Process Inventory accounts to track the costs of each department.

Which of the Following Statements Is TRUE of Process Costing