summarize total costs
compute cost for each equivalent unit
summarize flow of output
compute output in units
Answer is Right!
Answer is Wrong!
The correct answer is: B. compute cost for each equivalent unit.
A processing costing system is a type of cost accounting system that is used to track the costs of production in a manufacturing environment. The system is based on the concept of equivalent units, which are units that have been partially completed during the production process.
The second step in a processing costing system is to compute the cost for each equivalent unit. This is done by dividing the total costs of production by the total equivalent units produced. The cost per equivalent unit is then used to assign costs to the units that have been completed and to the units that are still in process.
The other options are incorrect because:
- Option A is incorrect because the first step in a processing costing system is to summarize the total costs of production.
- Option C is incorrect because the third step in a processing costing system is to summarize the flow of output.
- Option D is incorrect because the fourth step in a processing costing system is to compute output in units.