CMA Intermediate · Cost Accounting · Process Costing
Which of the following is NOT a feature of process costing?
Identification of each unit with a specific customer order is not a feature of process costing; it belongs to job costing. Process costing involves sequential processes, period-wise cost accumulation and accounting for normal and abnormal losses and by-products.
- AOutput of one process becomes the input of the next process
- BCosts are accumulated process-wise for a period of time
- CEach unit of output is separately identifiable with a specific customer orderCorrect
- DTreatment of normal loss, abnormal loss and by-products is required
Explanation
Process costing deals with continuous production of identical units, so units are not identified with specific customer orders. The other three are standard features: sequential processes, period-wise cost accumulation, and the need to account for losses and by-products.
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