Question 1

In many instances, direct materials are added at the beginning of the process.

Accepted Answer

A) True 
 B)False

Question 2

In order to be classified as a process costing system, the product flow must represent a series of processes in which only one process has input into the next process.

Accepted Answer

A) True 
 B)False

Question 3

The Bakersfield Company has the following information available:   At the beginning of the period, there were 800 units in process that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs. During the current period, 5,800 units were started and completed. Ending inventory contained 400 units that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs. (Assume that the company uses the FIFO process costing method.)
The equivalent units of production for direct materials and conversion costs, respectively, were

Accepted Answer

A)  6,200 for direct materials and 6,360 for conversion costs. 
B)  5,400 for direct materials and 6,520 for conversion costs. 
C)  6,200 for direct materials and 5,960 for conversion costs. 
D)  7,000 for direct materials and 6,520 for conversion costs. 
A)  6,200 for direct materials and 6,360 for conversion costs. 
B)  5,400 for direct materials and 6,520 for conversion costs. 
C)  6,200 for direct materials and 5,960 for conversion costs. 
D)  7,000 for direct materials and 6,520 for conversion costs.

Question 4

In a process costing system, unit cost is computed

Accepted Answer

A)  on the basis of productive output for a period of time. 
B)  for each job worked on. 
C)  for direct materials costs only. 
D)  only for the last production process. 
A)  on the basis of productive output for a period of time. 
B)  for each job worked on. 
C)  for direct materials costs only. 
D)  only for the last production process.

Question 5

Use the following information to perform the calculations requested below, assuming that the FIFO costing approach to a process costing system is being used.
Beginning work in process inventory: 16,000 units, 100 percent complete as to direct materials, 85 percent complete as to conversion costs
Ending work in process inventory: 36,000 units, 100 percent complete as to direct materials, 70 percent complete as to conversion costs
Units started during the month: 59,000
a. Calculate units to be accounted for during the month.
b. Calculate units started and completed during the month.
c. Calculate equivalent units for direct materials.
d. Calculate equivalent units for conversion costs.

Accepted Answer

@#IMG-DLM& a. 75,000

Question 6

The following unit data were assembled for the heating process of Morgan Processing, Inc., for the month of August. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO process costing method.   The number of equivalent units produced with respect to direct materials costs is

Accepted Answer

A)  39,500. 
B)  44,000. 
C)  49,000. 
D)  48,500. 
A)  39,500. 
B)  44,000. 
C)  49,000. 
D)  48,500.

Question 7

In a process cost report, accounting for physical units excludes the physical units in beginning inventory to arrive at "units to be accounted for."

Accepted Answer

A) True 
 B)False

Question 8

Information for the current month for Process 5 is shown below.   Direct materials are added at the beginning of the process. Beginning work in process is 40 percent complete as to conversion costs; ending work in process inventory is 60 percent complete. The cost of ending work in process inventory totaled

Accepted Answer

A)  $7,750. 
B)  $4,650. 
C)  $5,500. 
D)  $6,250. 
A)  $7,750. 
B)  $4,650. 
C)  $5,500. 
D)  $6,250.

Question 9

In a process costing system, each product is assigned the same amount of costs.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is true?

Accepted Answer

A)  The Work in Process Inventory account is the focal point of process costing. 
B)  Labor costs are accounted for differently from overhead costs in a process costing system. 
C)  Equivalent units usually are computed for direct materials and overhead combined. 
D)  To compute unit costs using the FIFO process costing approach, total costs of direct materials, direct labor, and overhead that have been accumulated in the Work in Process Inventory account or accounts are divided by the units worked on during the period. 
A)  The Work in Process Inventory account is the focal point of process costing. 
B)  Labor costs are accounted for differently from overhead costs in a process costing system. 
C)  Equivalent units usually are computed for direct materials and overhead combined. 
D)  To compute unit costs using the FIFO process costing approach, total costs of direct materials, direct labor, and overhead that have been accumulated in the Work in Process Inventory account or accounts are divided by the units worked on during the period.

Question 11

Measures of equivalent production are necessary in process costing because

Accepted Answer

A)  job order costing procedures cannot be applied. 
B)  unit costs are computed by departments or processes at fixed time intervals. 
C)  perpetual inventories are not employed in process plants. 
D)  production methods are more complex than in job order costing systems. 
A)  job order costing procedures cannot be applied. 
B)  unit costs are computed by departments or processes at fixed time intervals. 
C)  perpetual inventories are not employed in process plants. 
D)  production methods are more complex than in job order costing systems.

Question 12

The Taylor Company uses a process costing system. Assume that direct materials are added at the beginning of the period and that direct labor and overhead are added continuously throughout the process. The company uses the average costing method. The following data are available for one of its accounting periods:   Equivalent units for conversion costs are

Accepted Answer

A)  207,800. 
B)  192,200. 
C)  181,800. 
D)  200,000. 
A)  207,800. 
B)  192,200. 
C)  181,800. 
D)  200,000.

Question 13

Regardless of beginning inventory levels, the unit costs are determined by dividing the equivalent units by the total costs of the period.

Accepted Answer

A) True 
 B)False

Question 14

In a process costing system, products flow in a LIFO manner, from department to department.

Accepted Answer

A) True 
 B)False

Question 15

Lopez Company uses the FIFO process costing method to determine the product unit cost. The company began the period with 1,800 units in beginning inventory. During the period, 32,000 units were started and completed. There were 4,000 units in ending inventory at the end of the period. If all direct materials are added at the beginning of the process, the number of equivalent units for direct materials for the period is

Accepted Answer

A)  29,800. 
B)  28,000. 
C)  32,000. 
D)  36,000. 
A)  29,800. 
B)  28,000. 
C)  32,000. 
D)  36,000.

Question 16

A process costing system first accumulates the costs of direct materials, direct labor, and overhead for each process, department, or work cell and then assigns those costs to the products produced during a particular period.

Accepted Answer

A) True 
 B)False

Question 17

A company that manufactures potato chips would probably use a process costing system.

Accepted Answer

A) True 
 B)False

Question 18

Equivalent production is a measure of productive output of units for a period of time, expressed in terms of fully completed or equivalent whole units produced.

Accepted Answer

A) True 
 B)False

Question 19

During March, Department A started 300,000 units of product in a particular production process. The beginning work in process inventory was 50,000 units, and the ending inventory was 40,000 units. Direct materials are introduced at the start of processing, and beginning and ending inventories are considered to be 40 percent complete with respect to conversion costs. Department A uses the FIFO costing method. Units transferred out during March were

Accepted Answer

A)  310,000. 
B)  290,000. 
C)  320,000. 
D)  350,000. 
A)  310,000. 
B)  290,000. 
C)  320,000. 
D)  350,000.

Question 20

Bakersfield Company manufactures a variety of chips and utilizes a process costing system. The following information was provided by the accounting department as of May 31, 20xx:
a. Units started during the month of May totaled 35,000.
b. Units partially complete as of May 31 equaled 8,400.
c. Ending work in process inventory as of May 31, 20xx, was 75 percent complete.
d. Direct materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process.
e. No units were in process on May 1, 20xx.
Using the information provided, compute the equivalent units of production for direct materials and conversion costs for the month ended May 31, 20xx, assuming a FIFO costing flow.

Accepted Answer

The answer of Bakersfield Company manufactures a variety of chips...

In many instances, direct materials are added at the beginning of the process.

In order to be classified as a process costing system, the product flow must represent a series of processes in which only one process has input into the next process.

In a process costing system, unit cost is computed

In a process cost report, accounting for physical units excludes the physical units in beginning inventory to arrive at "units to be accounted for."

In a process costing system, each product is assigned the same amount of costs.

Which of the following statements is true?

Measures of equivalent production are necessary in process costing because

Regardless of beginning inventory levels, the unit costs are determined by dividing the equivalent units by the total costs of the period.

In a process costing system, products flow in a LIFO manner, from department to department.

A process costing system first accumulates the costs of direct materials, direct labor, and overhead for each process, department, or work cell and then assigns those costs to the products produced during a particular period.

A company that manufactures potato chips would probably use a process costing system.

Equivalent production is a measure of productive output of units for a period of time, expressed in terms of fully completed or equivalent whole units produced.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

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Exam 21: Costing Systems Process Costing

In many instances, direct materials are added at the beginning of the process.

In order to be classified as a process costing system, the product flow must represent a series of processes in which only one process has input into the next process.

In a process costing system, unit cost is computed

In a process cost report, accounting for physical units excludes the physical units in beginning inventory to arrive at "units to be accounted for."

In a process costing system, each product is assigned the same amount of costs.

Which of the following statements is true?

Measures of equivalent production are necessary in process costing because

Regardless of beginning inventory levels, the unit costs are determined by dividing the equivalent units by the total costs of the period.

In a process costing system, products flow in a LIFO manner, from department to department.

A process costing system first accumulates the costs of direct materials, direct labor, and overhead for each process, department, or work cell and then assigns those costs to the products produced during a particular period.

A company that manufactures potato chips would probably use a process costing system.

Equivalent production is a measure of productive output of units for a period of time, expressed in terms of fully completed or equivalent whole units produced.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Filters