Let’s briefly recap our studies thus far: (1) We have learned about direct and indirect costs, (2) We have learned how to apply direct costs (specifically direct labor and direct materials) to products or projects, and (3) We have learned a few ways to assign overhead costs to products or projects. In Chapter 2, we applied (assigned) direct costs by using the job order cost method.

In Chapter 4, How is Process Costing Used to Track Production Costs?, we will learn about another way of assigning direct costs: Process Costing.

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