To assign production costs to products manufactured,managers must trace all period costs to units produced and prepare process cost reports.

Question

Quizplus · Accepted Answer

While managers do need to trace direct materials, direct labor, and manufacturing overhead costs to units produced to assign production costs, period costs (such as advertising expenses or administrative salaries) are not assigned to units and are expensed in the period incurred. Additionally, process cost reports are typically used in industries with homogeneous products produced through a continuous process, whereas job order costing would be used in industries with customized or unique products.

To Assign Production Costs to Products Manufactured,managers Must Trace All