The appropriate cost accounting system to use when inventory items are produced on an assembly line is
a. job-order costing.
b. process costing.
c. weighted average.
d. perpetual method.
B. process costing
What system would a manufacturer of unique special orders or batch processes most likely use to accumulate costs?
a. process costing
b. contract costing
c. variable costing
d. job-order costing
D. job-order costing
In process costing, costs are accounted for by
a. year.
b. batch.
c. process.
d. job.
C. process
_______________ accumulates production costs by process and uses a work-in-process account for each process.
a. Process costing
b. Joint costing
c. Variable costing
d. Job-order costing
A. Process costing
Which is NOT a difference between the job-order costing system and the process costing system?
a. They accumulate their costs to different cost objectives.
b. The number of work-in-process accounts is different.
c. One does not use the finished goods acco
C. One does not use the finished goods account.
When products and their costs are moved from one process to the next process, these costs are referred to as
a. unit costs.
b. transferred-in costs.
c. WIP inventory costs.
d. equivalent unit costs.
B. transferred-in costs.
As production occurs, materials, direct labor, and applied manufacturing overhead are recorded in
a. materials.
b. finished goods.
c. work in process.
d. cost of goods sold.
C. work in process
In a process costing system, which of the following would be TRUE?
a. A process costing system is more expensive because it has more work-in-process accounts.
b. There is no need to track materials to processes.
c. There is no need to use time tickets to
C. There is no need to use time tickets to assign costs to processes.
Which is NOT a feature of a process costing system?
a. Standardized products pass through standardized processes.
b. Each unit is treated uniquely in receiving a process.
c. Manufacturing costs are accumulated by a process for a given time period.
d. Unit
B. Each unit is treated uniquely in receiving a process.
Which is TRUE about services?
a. Services can never be homogeneous and repetitively produced.
b. Some services may require that a sequence of uniform processes be performed.
c. Services cannot have work-in-process inventories.
d. All services require job-
B. Some services may require that a sequence of uniform processes be performed.
JIT firms are usually structured so they can use _______________ to determine product costs.
a. process costing
b. job-order costing
c. joint costing
d. variable costing
A. process costing
JIT manufacturing emphasizes
a. continuous improvement.
b. elimination of waste.
c. reduction of work-in-process inventories.
d. all of these.
D. all of these
Activity-based costing might have a role in process costing settings under what conditions?
a. under no conditions
b. when there are products produced with homogeneous processes and little diversity
c. when multiple products are being produced.
d. when on
C. when multiple products are being produced
_______________ is (are) the whole units that could have been produced in a period given the amount of manufacturing inputs used.
a. FIFO costing method
b. Transferred-in cost
c. Weighted average method
d. Equivalent units of output
D. Equivalent units of output
Equivalent units expresses all activity of the period in terms of
a. direct labor hours.
b. partially completed units.
c. fully completed units.
d. units of input.
C. fully completed units
_______________ represents the number of completed units that is equal, in terms of production inputs, to a given number of partially completed units.
a. Units completed
b. Equivalent units
c. Units started and completed
d. Total units in production
B. Equivalent units
_______________ determine(s) whether the costs assigned to units transferred out and to units in ending work in process are equal to the costs in beginning work in process, plus the manufacturing costs incurred in the current period.
a. Equivalent unit of
B. Cost reconciliation
Total costs to account for" does NOT include which of the following costs?
a. direct materials requisitioned for the department
b. prior department costs transferred in
c. ending work-in-process balance
d. beginning work-in-process balance
C. ending work in process balance
When conversion costs are uniform,
a. materials, labor, and overhead are applied at different rates throughout the process.
b. materials, labor, and overhead are added throughout the process at the same rate.
c. labor and overhead are added at the same ra
C. labor and overhead are added at the same rate but different materials are added at a different point
_______________ is a unit-costing method that excludes prior-period work and costs in computing current-period unit work and costs.
a. FIFO costing method
b. Transferred-in cost
c. Weighted average method
d. Equivalent units
A. FIFO costing method
Unit cost of materials for a department using the FIFO method of process costing is found by taking the total cost of materials issued to the department during the year divided by
a. units in process.
b. units started and completed.
c. total units manufac
D. equivalent units of output
If beginning inventory contained 2,000 units of product that were judged to be 40 percent complete as to labor, the equivalent units of production for labor during the current period under the FIFO method for these 2,000 units are
a. 2,000 units.
b. 800 u
C. 1,200 units
Lee Company began making lipstick in October 2011 using a single-step process. Lee incurred $42,000 for materials and $48,640 for conversion during the month. There were 21,000 cases of lipstick started in October and 3,000 cases unfinished (40 percent co
B. $2.00
Beginning inventory consisted of 1,000 units with costs of $21,000. All materials and 60 percent of labor and overhead were added in the prior period. In addition, another 8,000 units were started and completed. Unit costs are materials, $6.00; labor, $15
D. $270,600
_______________ is a unit-costing method that merges prior-period work and costs with current-period work and costs.
a. FIFO costing method
b. Transferred-in cost
c. Weighted average method
d. Operating costing
C. Weighted average method
When computing equivalent units of production, the method that combines partially completed units in beginning inventory with current period production is
a. the FIFO method.
b. the LIFO method.
c. the weighted average method.
d. the specific identificati
C. the weighted average method
Beginning inventory consisted of 10,000 units (20 percent converted) and ending inventory consisted of 20,000 units (40 percent converted). In addition, 60,000 units were started during the period. How many equivalent units for conversion costs were produ
D. 58,000 units
Irvin Corporation's Mixing Department began January 2011 with 10,000 gallons of product (40 percent completed) in process. During January, Irvin started 100,000 gallons of new product, of which 15,000 gallons remained in ending inventory (70 percent compl
C. 105,500 units
Irvin Corporation's Mixing Department began January 2011 with 10,000 gallons of product (40 percent completed) in process. During January, Irvin started 100,000 gallons of new product, of which 15,000 gallons remained in ending inventory (70 percent compl
B. 95,000 units
Beginning inventory for the month contained 3,000 units that were 35 percent complete with respect to materials. 45,000 units were completed and transferred out during the month. 4,500 units were in ending inventory, 10 percent complete with respect to ma
D. 45,450 units
The costs included in the cost per equivalent unit using the weighted average method are
a. current costs.
b. beginning work in process.
c. ending work in process.
d. both a and b.
D. both a and b
The material cost per equivalent unit using the weighted average method is calculated as
a. total material costs to account for/equivalent units for materials.
b. material costs added during the period/equivalent units for materials.
c. total material cos
A. total material costs to account for/equivalent units for materials
Which is NOT a disadvantage of the weighted average costing assumption in process costing?
a. There is a possibility of errors when input costs are changing significantly from one period to the next.
b. The cumulative effect of an error might produce a si
D. Unit costs are simpler to calculate
Which of the following process costing methods is simpler to use?
a. weighted average
b. LIFO
c. FIFO
d. specific identification
A. weighted average
Transferred-in costs are accounted for in the same manner as
a. materials added at the beginning of the process.
b. materials added at the end of the process.
c. conversion costs.
d. labor costs.
A. materials added at the beginning of the process
_______________ is the cost assigned to goods from a prior process.
a. FIFO costing method
b. Transferred-in cost
c. Weighted average method
d. Operating costing
b. Transferred-in cost
Materials are added to a second production department and will not increase the number of units produced in this department. Adding materials to the second department will
a. decrease total ending work in process.
b. change the amount of factory overhead
c. increase total unit cost
_______________ is a process that produces batches of different products which are identical in many ways but differ in others.
a. Operating costing
b. Cost reconciliation
c. Batch production process
d. Equivalent unit of output
C. Batch production process
_______________ is a costing system that uses job-order costing to assign material costs and process costing to assign conversion costs.
a. Operation costing
b. Cost reconciliation
c. Batch production process
d. Equivalent unit of output
A. Operation costing
When job-order costing is used to assign material costs and process costing is used to assign conversion costs, it is called
a. matrix costing.
b. blend costing.
c. operation costing.
d. variable costing.
c. operation costing
Which of the following would NOT be true when there is spoilage?
a. Equivalent units must be calculated for spoiled units.
b. Normal and abnormal spoilage are distinguished.
c. The units to account for are greater than the total units accounted for indica
D. The total units accounted for are greater than the total units to account for indicating spoilage.
Spoilage in a process costing process means
a. fewer units leave the process than enter it.
b. fewer units enter a process than leave it.
c. a process is no longer viable.
d. products are receiving too much attention.
A. fewer units leave the process than enter it.