ACCT CH20

Process Operations

Involves the mass production of similar or identical items.

Continuous Flow

A characteristic of process operations where production processes flow sequentially.

Standardized Procedures

Methods established to ensure efficiency and uniformity in process operations.

Direct Materials

Raw materials that are directly traceable to the finished product.

Direct Labor

Labor costs that can be directly attributed to the production of specific goods.

Factory Overhead

Indirect costs incurred in the manufacturing process which cannot be directly attributed to specific units of production.

Equivalence Units of Production (EUP)

Represents the number of complete units that could be produced with the costs incurred during a period.

Conversion Costs

Costs associated with converting raw materials into finished products, typically including direct labor and factory overhead.

Cost per Equivalent Unit

The total costs divided by the number of equivalent units, used to allocate costs in a production process.

Costs Assignment

The process of distributing costs to completed units and Work in Process (WIP) inventory.

Process Cost Report

A summary that summarizes the entire production process for cost control and financial reporting.

Hybrid Costing System

A system that combines elements of process costing and job order costing to accommodate standardization and customization.

Yield

Measures the efficiency of a production process calculated as Output divided by Input.

Physical Flow of Units

Refers to the units started, completed, and still in process (WIP) during a production period.

Work in Process (WIP)

Goods that are in the production process but are not yet completed.

Cost of Goods Sold (COGS)

An accounting term for the direct costs attributable to the production of goods sold by a company.