Question

Which of the following statements about companies that use processing costing is false?

a. A processing department is an organizational unit where work is performed on a product and where materials, labor, or overhead costs are added to the product.
b. Costs are accumulated by department.
c. Raw material costs are added only to the first processing department.
d. A separate Work in Process account is maintained for each processing department.

Answer 1

The false statement about companies using process costing is that raw material costs are added only to the first processing department.

Step-by-step explanation:

The false statement about companies that use process costing is c. Raw material costs are added only to the first processing department. In process costing, raw material costs are added to each processing department as the product moves through the production process. Once raw materials are added to the first processing department, they become part of the product's total cost and are included in the cost accumulation in subsequent processing departments. Each department maintains a separate Work in Process account to track the costs incurred in that department.