Sistema de costos por procesos

Jaqui Tinoco

4 Mar 201904:10

Summary

TLDRThe video script discusses the process costing system, used in manufacturing to accumulate production costs by department. It highlights objectives like determining total manufacturing costs and calculating unit costs. The script also covers advantages like standardized production and ecological processing, and disadvantages such as difficulty in identifying direct cost elements per unit. Industries like chemical and pharmaceutical are mentioned as potential users of this system.

Takeaways

📘 The process costing system is a method for accumulating production costs by department or cost center.
🏭 A department is the main functional division in a factory where manufacturing processes are carried out.
🔢 Costs for raw materials, direct labor, and manufacturing overhead are accumulated in the product cost accounts.
🎯 The primary objective of direct labor costs is to work out the total cost to determine the income.
🔁 The production in a process costing system is continuous and uniform, with the unit cost being an average result.
🌐 Advantages of continuous production include standardized costs, more ecological processing, and streamlined administration.
🚫 Disadvantages include the inability to identify direct cost elements in each finished unit, rigid production conditions, and the need to quantify production.
🏷️ The importance of the process costing system lies in determining how production costs incurred during the period will be assigned to each department.
🔑 It is used in industries that transform raw materials or materials, such as chemical and pharmaceutical companies.
📊 The system must be compatible with the nature of the business and understand the stages of the production process.
🔄 The cost flow begins with costs and factors entering the first process and is transferred through to finished goods and then to cost of sales.

Q & A

What is the process costing system?
-The process costing system is a method of accumulating production costs by department or cost center. It involves tracking costs associated with raw materials, direct labor, and manufacturing overhead as they move through various stages of production.
What are the main objectives of using process costing in manufacturing?
-The main objectives of process costing include determining total manufacturing costs, identifying direct labor costs, and ultimately calculating the total cost of production to determine profit margins.
How does the production process in a continuous system differ from other types of production?
-In a continuous production system, the production is uniform and ongoing, which allows for standardized costs and more ecological processing. This contrasts with batch or job production methods where each unit is produced separately.
What are the advantages of continuous production in terms of cost management?
-Advantages of continuous production include standardized costs, which can lead to more predictable and manageable expenses, and more ecological processing due to the uniform nature of the production process.
What are the disadvantages of using process costing in a manufacturing setting?
-Disadvantages include the difficulty in identifying direct cost elements in each finished unit and the rigidity of production conditions, which may require precise quantification of production and processes.
Why is it important to determine how costs are assigned in the process costing system?
-Determining how costs are assigned is crucial because it affects how production costs incurred during a period are allocated to each department, which in turn impacts financial reporting and decision-making.
In which types of industries is the process costing system commonly used?
-The process costing system is commonly used in industries that involve the transformation of raw materials or materials, such as chemical and pharmaceutical industries.
What is the nature of the process costing system and how does it need to be compatible with the business?
-The process costing system must be compatible with the nature of the business and its production stages. It functions effectively when there are well-defined stages in the production process, facilitating the tracking of costs as they move through each stage.
How does the cost flow in the process costing system?
-The cost flow in the process costing system begins when costs and factors enter the first process, are transferred from process one to process two, and eventually move to the finished goods warehouse and then to the cost of sales.
What are the key characteristics of a production process that would benefit from using the process costing system?
-Key characteristics include continuous and uniform production, which allows for the averaging of unit costs and the tracking of costs through various stages of production.
How does the process costing system help in managing administrative tasks in manufacturing?
-The process costing system aids in managing administrative tasks by providing a clear and systematic way to track and allocate costs, which can streamline financial management and decision-making processes in manufacturing.

Outlines

00:00

🔍 Process Costing System Overview

This paragraph introduces the process costing system, which is a method of accumulating production costs by department or cost center. It explains that a department is a main functional division in a factory where manufacturing processes occur. Costs such as raw materials, direct labor, and manufacturing overhead are accumulated in the production account processes. The system is designed to determine the total cost of production to identify the income characteristics, which are particularly relevant for continuous and uniform production where the unit cost is an average result.

🚀 Advantages and Disadvantages of Process Costing

The paragraph discusses the advantages of process costing, including standardized costs, more ecological processing, and administrative efficiency. However, it also points out the disadvantages, such as the inability to identify direct cost elements in each finished unit, rigid production conditions, and the necessity to quantify production and processes. The importance of the process costing system is emphasized due to its role in determining how production costs incurred during the period will be assigned to each department.

🏭 Industries Utilizing Process Costing

This section highlights the industries where process costing is commonly used, specifically mentioning companies that transform raw materials or materials, such as those in the chemical and pharmaceutical sectors. It underscores that the process costing system must be compatible with the nature of the business and the understanding of its production process.

🔄 Cost Flow in Process Costing

The paragraph describes the cost flow in the process costing system, starting with the entry of costs and factors into the first process, their transfer from process to process, and finally to the finished goods warehouse and then to the cost of sales. This flow is crucial for understanding how costs move through the production system and are ultimately accounted for in the financial statements.

Mindmap

Keywords

💡Process Costing

Process costing is a method of accumulating the costs of production by department or cost center. It is central to the video's theme as it explains how costs are accumulated for products in manufacturing processes. In the script, it is mentioned as a system where costs for raw materials, labor, and manufacturing expenses are accumulated in the production process.

💡Department

A department is defined as a main functional division in a factory where manufacturing processes are carried out. The script uses the term to describe the units within a factory where costs are accumulated, emphasizing the structured approach of process costing in different areas of production.

💡Direct Labor Cost

Direct labor cost refers to the wages paid to the workers who are directly involved in the production process. The video script highlights direct labor cost as one of the cost elements that are accumulated in the product cost account, indicating its importance in the costing system.

💡Manufacturing Costs

Manufacturing costs encompass all expenses associated with the production of goods, including direct materials, direct labor, and overhead costs. The script discusses these costs in the context of process costing, indicating how they are tracked and accumulated throughout the production process.

💡Continuous Production

Continuous production is a type of production process characterized by a steady and uniform flow of goods being manufactured. The script mentions this as a characteristic of the production process where process costing is applied, highlighting the uniformity and standardization in cost calculation.

💡Uniform Production

Uniform production refers to the consistent and regular output of products in a manufacturing setting. The video script uses this term to describe a scenario where the production process is predictable and standardized, which is crucial for accurate process costing.

💡Unit Cost

Unit cost is the total cost of production divided by the number of units produced. The script mentions unit cost as the result of an average, which is essential for determining the profitability and pricing of products in a continuous production setting.

💡Standardized Costs

Standardized costs are predetermined costs per unit of output, used for budgeting and performance evaluation. The video script mentions the advantages of standardized costs in continuous production, indicating how they contribute to cost predictability and efficiency.

💡Ecological Processing

Ecological processing refers to manufacturing practices that are environmentally friendly and sustainable. The script briefly touches on the ecological aspect of standardized production, suggesting that process costing can be part of a more sustainable manufacturing approach.

💡Rigidity in Production Conditions

Rigidity in production conditions implies that the manufacturing process is inflexible and does not easily adapt to changes. The script points out this disadvantage of process costing, where the system may struggle with variability in production demands.

💡Cost Flow

Cost flow describes the movement of costs from one stage of production to another until they reach the finished goods and eventually the cost of sales. The script illustrates the cost flow as it starts with costs entering the first process and eventually transferring to finished goods and cost of sales, which is fundamental to understanding process costing.

Highlights

The process cost system is an accumulation of production costs by department or cost center.

A department is a main functional division in a factory where manufacturing processes are executed.

In a process cost system, costs for raw materials, direct labor, and manufacturing overhead are accumulated in the product account.

Objectives include managing direct labor costs.

The total cost of production is worked out to determine income.

Production is continuous and uniform, with the unit cost being an average result.

Advantages of continuous production include standardized costs and more ecological processing.

It is impossible to identify direct cost elements in each finished unit.

Rigid production conditions and the need to quantify production and processes are mentioned as disadvantages.

The importance of the process cost system lies in determining how production costs will be assigned to each department.

The system is used in industries that transform raw materials or materials, such as chemical and pharmaceutical companies.

The process cost system must be compatible with the nature of the company's business.

The system only functions when there are well-defined stages in the production process.

The cost flow starts when costs and factors enter process one and is transferred through to finished goods and then to cost of sales.

The nature of the process cost system must be understood to effectively implement it in a business.