Discussion Questions 1. What characteristics of the product or manufacturing process would lead a company to use a process costing system? Give two examples of companies that are likely to be using process costing. What characteristics of the product or manufacturing process would lead a company to use a job costing system? Give two examples of companies that are likely to be using job costing. 2. How are process costing and job costing similar? How are they different? 3. What are conversion costs? In a job costing system, at least some conversion costs are assigned directly to products. Why do all conversion costs need to be assigned to processing departments in a process costing system? 4. Why not assign all costs of production during a period to only the completed units? What happens if a company does this? Why are the costs of production in any period allocated between completed units and units in work in process? Is there any situation where a company can assign all costs of production during a period to the completed units? If so, when? 5. What information generated by a process costing system can be used by management? How can management use this process costing information? 6. Why are the equivalent units for direct materials often different from the equivalent units for conversion costs in the same period? 7. Describe the flow of costs in a process costing system. List each type of journal entry that would be made and describe the purpose of that journal entry. 8. If a company has very little or no inventory, what effect does that lack of inventory have on its process costing system? What other benefits result from having very little to no inventory? 9. How does process costing differ between a first processing department and a second or later processing department? 10. “Process costing is easier to use than job costing.” Do you agree or disagree with this statement? Explain your reasoning. 11. Think of a business or an organization that would use process costing. What types of waste are likely to be generated during the manufacturing process? Are there ways to avoid this waste or minimize it? How might managerial accounting support the efforts to reduce waste in the production process? 12. Provide an example of how a company may change its processes to make its manufacturing more efficient or environmentally sustainable. How will the company benefit?

BuyFind

Managerial Accounting (4th Edition)

4th Edition
Karen W. Braun + 1 other
Publisher: PEARSON
ISBN: 9780133428377
BuyFind

Managerial Accounting (4th Edition)

4th Edition
Karen W. Braun + 1 other
Publisher: PEARSON
ISBN: 9780133428377
Chapter 5, Problem 5.58ACT
Textbook Problem

Discussion Questions

  1. 1. What characteristics of the product or manufacturing process would lead a company to use a process costing system? Give two examples of companies that are likely to be using process costing. What characteristics of the product or manufacturing process would lead a company to use a job costing system? Give two examples of companies that are likely to be using job costing.
  2. 2. How are process costing and job costing similar? How are they different?
  3. 3. What are conversion costs? In a job costing system, at least some conversion costs are assigned directly to products. Why do all conversion costs need to be assigned to processing departments in a process costing system?
  4. 4. Why not assign all costs of production during a period to only the completed units? What happens if a company does this? Why are the costs of production in any period allocated between completed units and units in work in process? Is there any situation where a company can assign all costs of production during a period to the completed units? If so, when?
  5. 5. What information generated by a process costing system can be used by management? How can management use this process costing information?
  6. 6. Why are the equivalent units for direct materials often different from the equivalent units for conversion costs in the same period?
  7. 7. Describe the flow of costs in a process costing system. List each type of journal entry that would be made and describe the purpose of that journal entry.
  8. 8. If a company has very little or no inventory, what effect does that lack of inventory have on its process costing system? What other benefits result from having very little to no inventory?
  9. 9. How does process costing differ between a first processing department and a second or later processing department?
  10. 10. “Process costing is easier to use than job costing.” Do you agree or disagree with this statement? Explain your reasoning.
  11. 11. Think of a business or an organization that would use process costing. What types of waste are likely to be generated during the manufacturing process? Are there ways to avoid this waste or minimize it? How might managerial accounting support the efforts to reduce waste in the production process?
  12. 12. Provide an example of how a company may change its processes to make its manufacturing more efficient or environmentally sustainable. How will the company benefit?

Expert Solution

Want to see the full answer?

Check out a sample textbook solution.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.

Additional Business Textbook Solutions

Find more solutions based on key concepts
The Trolley Toy Company manufactures toy building block sets for children. Trolley is planning for 2019 by deve...

Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)

3. Which method almost always produces the most depreciation in the first year? a. Units-of-production b. Strai...

Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)

On what three things is equivalence based?

Construction Accounting And Financial Management (4th Edition)

5. Which inventory costing method results in the lowest net income during a period of rising inventory costs? W...

Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)

Why is the capital-budgeting process so important?

Foundations of Finance (9th Edition) (Pearson Series in Finance)

4. Figure 1.1 outlines the operations, finance/accounting, and marketing functions of three organizations. Prep...

Operations Management: Sustainability and Supply Chain Management (12th Edition)

The best fits using exponential smoothing, trend analysis, and linear regression for the given data. Introducti...

Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)

Consider the sales data for Computer Success given in Problem 7. Use a 3-month weighted moving average to forec...

Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)