Companies that use a process-cost accounting system would:
A) establish a separate Work-in-Process Inventory account for each manufacturing department.
B) establish a separate Finished-Goods Inventory account for each manufacturing department.
C) pass completed production directly to Cost of Goods Sold.
D) charge goods produced with actual overhead amounts rather than applied overhead amounts.
E) eliminate the need for the Finished-Goods Inventory account.

Question

Quizplus · Accepted Answer

In a process-cost accounting system, costs are tracked through sequential production stages or departments, necessitating a separate Work-in-Process Inventory account for each department to accurately capture the costs incurred at each stage.

Companies That Use a Process-Cost Accounting System Would