Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments?
Process
Process costing is used in companies that
produce bricks for sale to the public
A producer of ____ would not use a process costing system
Stained Glass Window
A process costing system is used by a company that
produces homogenous products
Which is the best accumulation procedure to sue for continuous mass production of like units?
Process
Equivalent units of production are equal to the
number of whole units that could have been completed if all work of the period had been used to produce while units
In a process costing system using the weighted average method, cost per equivalent unit for a given cost component is found by dividing which of the following by EUP?
Current period costs plus the cost of beginning inventory
The weighted average method is thought by some accountants to be inferior o the FIFO method because it
commingles costs of two periods
The first step in determining the cost per EUP per cost component under the weighted average method is to
add the beginning WIP Inven cost to the current periods production cost
The difference between EUP calculated using FIFO and EUP calculated weighted average is the equivalent units
residing in beginning WIP Inven
EUP calculations for standard process costing are the same as
the EUP calculations for FIFO process costing
In a FIFO process costing system, which of the following are assumed to be completed first in the current period?
units started last period
To compute equivalent units of production using the FIFO method of process costing, work for the current period must be stated in units
completed from beginning inventory, units started and completed during the period, and units partially completed in ending Inven
The FIFO method of costing will produce the same cost of goods transferred out amount as the weighted average method when
there is no beginning WIP Inventory
The primary difference between the FIFO and weighted average methods of process costing is
the treatment of beginning WIP Inventory
Material is added at the beginning of a process costing system. The beginning WIP Inven for the process was 30 percent complete as to conversion costs. Using the FIFO method of costing, the number of equivalent units of material for the process during the
units started this period plus the units in ending WIP Inventory
In a cost of production report using process costing ,transferred-in costs are similar to the
cost of material added at the beginning of production
In a process costing system, the journal entry to record the transfer of goods from department#2 to Finished Goods Inven is a
debit Finished F=Goods Inven, credit WIP Inven #2
Transferred-in cost represents the cost from
all prior departments
Which of the following are the same between the weighted average and FIFO methods of calculating EUPs?
Units to account for(Yes) EUP Calculations (No) Total Cost to account for (Yes)
Process costing techniques should be used in assigning costs to products
if a product is composed of mass-produced homogenous units
Averaging the total cost of completed beginning WIP Inven and units started are completed over all units transferred out is known as
modified FIFO
A process costing system
restates WIP Inven in terms of completed units
A process costing system does which of the following?
Calculates EUPs(Yes) Assigns costs to inventories(yes)
A process costing system
Calculates average cost per whole unit (no) Determines total units to account for (Yes)
A hybrid costing system combines characteristics of
job order and process costing systems
When standard costs are used in process costing
the weighted average method of calculating EUPs makes computing transferred-out easier
Which of the following is subtracted from weighted average EUP to derive FIFO EUP?
beginning WIP EUP produced in prior period
The cost of abnormal continuous losses is
written off as a loss on an equivalent unit basis
Abnormal spoilage can be
Continuous (Yes) Discrete (Yes)
When the cost of lost units must be assigned, and those same units must be included in an equivalent unit schedule, these units are considered
abnormal and continuous
A continuous loss
occurs evenly throughout the production process
Which of the following would be considered a discrete loss in a production process?
adding the wrong components when assembling a stereo
The method of neglect handles spoilage that is
continuous and normal
The cost of normal discrete losses is
absorbed by all units past the inspection point on an equivalent unit basis
The cost of abnormal continuous losses is
written off as a loss on equivalent unit basis
Normal spoilage units resulting from a continuous process
result in a higher unit cost for the goods units produced
When the cost of lost units must be assigned, and those same units must be included in an equivalent unit schedule, these units are considered
abnormal and continuous
Which of the following accounts is credited when abnormal spoilage is written off in an actual cost system?
WIP
The cost of abnormal discrete units must be assigned to
GoodUnits (No) Lost Units (Yes)
Which of the following statements is false? The cost of rework on defective units, if
abnormal, should be prorated among WIP, Finished Goods, and COGS
If normal spoilage is detected at an inspection point within the process (rather than at the end), the cost of that spoilage should be
allocated to good units that have passed the inspection point
Which of the following is not a question that needs to be answered with regard to quality control ?
What happens to the spoiled units?
Normal spoilage units resulting from a continuous process
result in a higher unit cost for the good units produced
The addition of material in a successor department that causes an increase in volume is called
accretion