alleryStart learning →How is a batch defined in a process costing system?
AA group of units sold to one buyer
BThe units completed by a department
CMaterials added at the start of production
DThe units finished within one month
Answer & Solution
Correct answer: C. Materials added at the start of production
1. Items enter production in batches rather than individually.
2. A batch is each time a quantity of materials is added to the first point of production to keep the work flowing.
3. A unit is one of the products manufactured within a batch.
4. Costs are eventually averaged over the units produced in the period to give the cost of one item.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 3.1 Introduction_
Keep practising Process Costing
Browse all Process Costing questions for US CMA Part 1, or explore more Management Accounting topics.
Related questions
Eight one gallon buckets are left outside in the rain and each ends up three quarters fullMaterials costing $599,427 were added in May for the 44,700 units started that month. WhatIn process costing, the costs of a manufactured item are grouped into which two categoriesProcess costing is used for which kind of manufacturing?Job order or process costing?Match the stage to what happens thereComplete the equivalent unit countWhich amount is bigger?