The primary advantage of process cost systems is that there is no underapplied or over-or-underapplied overhead manufacturing overhead to account for.

Question

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Instead of accumulating work in process costs by jobs,process costing systems accumulate product costs by departments.Similar to the approach used in a job order cost system,a process cost system uses a predetermined overhead rate to apply overhead to the production;however,it is done for each department (rather than for each job).If the amount applied does not equal the actual amount of overhead,overhead will be underapplied or overapplied.

The Primary Advantage of Process Cost Systems Is That There