Duran Manufacturing uses a process costing system and manufactures its product in three departments.Which of the following is NOT a way in which Duran can use the cost per unit of each process?
A) Duran can look for ways to cut the costs when actual process costs are more than planned process costs.
B) Duran needs to set the selling price to cover the costs of making the product and provide a profit.
C) Duran can only use the cost per unit of each process if all units are fully completed at the end of the accounting period.
D) Duran needs to know the ending balances in the following accounts: Work-In-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.

Question

Quizplus · Accepted Answer

Duran cannot use the cost per unit of each process unless all units are fully completed at the end of the accounting period. This is because process costing assigns costs to each unit based on the total cost of the process divided by the total number of units produced. If some units are not fully completed at the end of the accounting period, their cost per unit will not be accurate and will not reflect the total cost of the process. Therefore, Duran cannot use the cost per unit of each process if all units are not fully completed at the end of the accounting period.

Duran Manufacturing Uses a Process Costing System and Manufactures Its