A Set of Activities Designed to Produce a Product or Service

question 1

Multiple Choice

A set of activities designed to produce a product or service for an internal or external customer is called a(n) :

• A) Process
• B) System
• C) Strategy
• D) Organization

Comprehend the concept of equivalent units of production in a process costing system.

Ability to journalize the transfer of costs between departments in a process cost system.

Analyze the change in cost per unit over different periods and determine its impact.

Interpret process costing system data to assess operational efficiency.

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Definitions:

Processing Department

An organizational unit where work is performed on a product and where materials, labor, or overhead costs are added to the product.

Equivalent Units

A measure used in cost accounting to express the amount of work done by employees and machines in terms of fully completed units of output.

Ending Inventory

The total value of all inventory, including raw materials, work-in-process, and finished goods, at the end of an accounting period.

Weighted-Average Method

A cost accounting method that averages the costs of goods available for sale for the calculation of the cost of goods sold and ending inventory.