E 2. Tom’s Bakery makes a variety of cakes, cookies, and pies for distribution to five major chains of grocery stores in the area. The company uses a standard manufacturing process for all items except special-order cakes. It currently uses a process costing system. Tom, the owner of the company, has some urgent questions, which are listed at the top of the next page. Which of these questions can be answered using information from a process costing system? Which can be best answered using information from a job order costing system? Explain your answers.

1. How much does it cost to make one chocolate cheesecake?

2. Did the cost of making special-order cakes exceed the cost budgeted for this month?

3. What is the value of the pie inventory at the end of June?

4. What were the costs of the cookies sold during June?

5. At what price should Tom’s Bakery sell its famous brownies to the grocery store chains?

6. Were the planned production costs of $3,000 for making pies in June exceeded?

Work in Process Inventory Accounts in Process Costing Systems