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Horngren'S Financial And Managerial Accounting
Found in: Page 1005

Short Answer

Question: Describe the flow of costs through a process costing system.


In process costing, the cost is arrived by first adding the direct material cost at the beginning of the process and all the other cost (whether direct labor or overhead) are gradually added over the course of the production process.

See the step by step solution

Step by Step Solution

  Step 1: Process costing system

Process costing system requires to compute the cost of production of the goods at every stage of process involved in production.

Step 2: The flow of cost through a process costing system


Amount ($)

Direct cost at process 1


Add: Indirect cost at process 1


Add: Direct cost at process 2


Add: indirect cost at process 2


Total cost


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