Question

Please describe the flow of class through a process costing system assuming the processes involved are mixing, bottling and packaging

Answer 1

The flow of process through the process costing system takes

Mixing process : The process involves all the materials are processed through mixing them and preparing the goods. The cost of all materials put-in are transferred to the next process/department ie. bottling.

Bottling process : The process involves the putting of finished goods into bottles called bottling. The all material and conversion costs are then transferred to next process ie. packaging.

Packaging process: The finished and bottled goods are packed in packaging of defined number of units for the final dispatch to the client or distributor. All the costs whether material or conversion, got assembled and collected at this point and total cost of production is calculated. The cost per unit is drive-out. This will help to come-out with the sales price per unit.

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