Operation Costing

question 70

Multiple Choice

Operation costing:

• A) tends to parallel job-order costing with respect to the treatment of conversion cost.
• B) tends to parallel process costing with respect to the treatment of conversion cost.
• C) tends to parallel process costing with respect to the treatment of direct materials.
• D) would likely be used by a manufacturing plant that produces one model of a single product.
• E) is commonly known as a joint-costing system.

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Definitions:

Materials

Materials or ingredients utilized in the creation or fabrication of products.

First Processing Department

The initial department in a manufacturing process where raw materials begin their transformation into finished products.

First-In, First-Out

describes an inventory valuation method where goods first acquired are the first to be sold or used.

Process Costing

A costing method used where identical or similar goods are mass-produced, allocating production costs across all units produced.