Question

* You must apply the concepts of job order and process costing and mass production:

Identify (in a pharmaceutical industry) the production (services) process: is process costing or job order costing. How do you think about this classification? Also, explain the process costing and the mass productions concepts.

Answer 1

a pharmaceutical industry the production (services) process is process costing

Process Costing:

• It is a method of assigning costs to units of production in companies producing large quantities of homogeneous products. Used in most mass-production settings
• a process cost system analyzes the net cost of a manufacturing process.
• The unit cost for filling bottles is simply the net costs incurred while filling all the bottles during the period divided by the number of bottles filled. Since most manufacturing processes involve more than one step, a similar calculation is made for each step to arrive at a unit cost average for the entire production system.