Question 1

In a process costing system, all production costs are assigned to departments.

Accepted Answer

A) True 
 B)False

Question 2

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 3

When the FIFO cost flow assumption is used, the equivalent units will always equal the actual units in beginning work in process inventory, plus the actual units started and completed during the current period plus the percent of ending work in process inventory completed during the current period.

Accepted Answer

A) True 
 B)False

Question 4

Process costing information can inform managers about the amounts and types of products ordered by specific customers.

Accepted Answer

A) True 
 B)False

Question 5

The total costs that will be transferred into the Finished Goods Inventory account during the current period are

Accepted Answer

A)  $144,768. 
B)  $180,050. 
C)  $164,736. 
D)  $160,080. 
A)  $144,768. 
B)  $180,050. 
C)  $164,736. 
D)  $160,080.

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. $\begin{array}{|l|l|}
\hline & \text { Units } \
\hline \begin{array}{l}
\text { Beginning work in process inventory } \
\text { (30 percent complete) }
\end{array} & 5,000 \
\hline \text { Units started in August } & 44,000 \\hline \begin{array}{l}
\text { Ending work in process } \
\text { (60 percent complete) }
\end{array} & 4,500 \
\hline
\end{array}$ 
-
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

Production processes that lend themselves to the use of process cost analysis usually have a FIFO product flow within the process.

Accepted Answer

A) True 
 B)False

Question 8

Information for the current month for Process 3 is shown below. $\begin{array}{|l|l|l|} 
\hline& \text { Direct Materials } & \text { Conversion Costs } \
\hline \text { Beginining work in process } & \$ 3,600 & \$ 930 \
\hline \text { Current month's costs } & 55,800 & 48,204 \
\hline \text { Equivalent units based on the FIFO costingmethod } & 52,000 & \$ 1,800 \
\hline
\end{array}$ Units completed-60,000
Units in ending work in process-6,000
Direct materials are added at the beginning of the process. Beginning work in process is 30 percent complete as to conversion costs; ending work in process inventory is 50 percent complete. The cost of ending work in process inventory totaled

Accepted Answer

A)  $7,740. 
B)  $4,224. 
C)  $5,400. 
D)  $8,700. 
A)  $7,740. 
B)  $4,224. 
C)  $5,400. 
D)  $8,700.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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. $\begin{array}{|l|l|}
\hline & \text { Units } \
\hline \begin{array}{l}
\text { Beginning work in process inventory } \
\text { (30 percent complete) }
\end{array} & 5,000 \
\hline \text { Units started in August } & 44,000 \\hline \begin{array}{l}
\text { Ending work in process } \
\text { (60 percent complete) }
\end{array} & 4,500 \
\hline
\end{array}$
-
 The number of equivalent units produced with respect to conversion costs is

Accepted Answer

A)  43,700. 
B)  45,700. 
C)  48,200. 
D)  50,200. 
A)  43,700. 
B)  45,700. 
C)  48,200. 
D)  50,200.

Question 11

The reason for combining direct labor and overhead costs together and calling them "conversion costs" is that

Accepted Answer

A)  they both are direct costs of production. 
B)  the equivalent unit amount for direct materials will be the same as that for direct labor and overhead costs. 
C)  both types of costs usually are incurred uniformly throughout the production process. 
D)  the costs for direct labor and overhead are not accounted for separately. 
A)  they both are direct costs of production. 
B)  the equivalent unit amount for direct materials will be the same as that for direct labor and overhead costs. 
C)  both types of costs usually are incurred uniformly throughout the production process. 
D)  the costs for direct labor and overhead are not accounted for separately.

Question 12

Trunkey Products, Inc., uses a process costing system and has just completed production for the month of November 20xx. The following production data were obtained from the accounting records:
a. Units in beginning inventory totaled 6,800 and were 30 percent complete as of November 1 (all direct materials were added to these products in the preceding month).
b. During the period, 156,200 units were started.
c. 19,200 units were partially completed as of November 30, 20xx.
d. Ending work in process inventory was 40 percent complete at month end.
From the data given, compute the equivalent units of production for direct materials and conversion costs for the month ended November 30, 20xx, assuming a FIFO flow of costs.

Accepted Answer

The answer of Trunkey Products, Inc., uses a process costing...

Question 13

Because process costing is normally associated with a continuous production flow, products that are in process at the beginning of the period are assumed to be the first completed during the current period.

Accepted Answer

A) True 
 B)False

Question 14

In a process costing system, percentage-of-completion factors normally are obtained from

Accepted Answer

A)  accounting records. 
B)  job order cost cards. 
C)  supervisors in the production departments. 
D)  time cards. 
A)  accounting records. 
B)  job order cost cards. 
C)  supervisors in the production departments. 
D)  time cards.

Question 15

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 16

Jackson Electronics, Inc., manufactures a variety of microelectronic component parts and utilizes a process costing system. The following information was provided by the accounting department as of July 31, 2010:
a. Units started during the month of July totaled 118,200.
b. Units partially complete as of July 31 equaled 7,400.
c. Ending work in process inventory as of July 31, 2010, was 70 percent complete.
d. Direct materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process.
e. Units in process on July 1, 2010 - 8,200 units.
Using the information provided, compute the equivalent units of production for direct materials and conversion costs for July using the average costing method.

Accepted Answer

The answer of Jackson Electronics, Inc., manufactures a variety of...

Question 17

One of the steps in preparing the process cost report under FIFO method requires dividing current costs charged to the Work in Process Inventory account of each department or production process by equivalent units to calculate the cost per equivalent unit.

Accepted Answer

A) True 
 B)False

Question 18

For a company having two or more production departments, at the end of the accounting period a separate process cost report for each department is prepared.

Accepted Answer

A) True 
 B)False

Question 19

Blackwell Corporation uses a process costing system and has just completed production for the month of December 20xx. The following production data were obtained from the accounting records:
a. Units in beginning inventory totaled 9,000 and were 80 percent complete as of December 1 (all direct materials were added to these products in the preceding month).
b. During the period, 216,000 units were started.
c. 17,400 units were partially completed as of December 31, 20xx.
d. Ending work in process inventory was 100 percent complete with respect to direct materials and 70 percent complete with respect to conversion costs at month end.
Using the information provided, compute the equivalent units of production for direct materials and conversion costs for the month ended December 31, 20xx, assuming a FIFO costing flow.

Accepted Answer

The answer of Blackwell Corporation uses a process costing system...

Question 20

The use of the FIFO method would result in a company's process cost report showing

Accepted Answer

A)  units transferred out as one amount with no distinction made for beginning inventory. 
B)  units transferred out as two amounts: one for beginning inventory and the other for units started and completed during the month. 
C)  units transferred out as two amounts: one for units completed during the period and one for ending inventory. 
D)  units transferred out as three amounts: one for beginning inventory, one for units started and completed during the period, and one for ending inventory. 
A)  units transferred out as one amount with no distinction made for beginning inventory. 
B)  units transferred out as two amounts: one for beginning inventory and the other for units started and completed during the month. 
C)  units transferred out as two amounts: one for units completed during the period and one for ending inventory. 
D)  units transferred out as three amounts: one for beginning inventory, one for units started and completed during the period, and one for ending inventory.

In a process costing system, all production costs are assigned to departments.

When the FIFO cost flow assumption is used, the equivalent units will always equal the actual units in beginning work in process inventory, plus the actual units started and completed during the current period plus the percent of ending work in process inventory completed during the current period.

Process costing information can inform managers about the amounts and types of products ordered by specific customers.

The total costs that will be transferred into the Finished Goods Inventory account during the current period are

Production processes that lend themselves to the use of process cost analysis usually have a FIFO product flow within the process.

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

The reason for combining direct labor and overhead costs together and calling them "conversion costs" is that

Because process costing is normally associated with a continuous production flow, products that are in process at the beginning of the period are assumed to be the first completed during the current period.

In a process costing system, percentage-of-completion factors normally are obtained from

One of the steps in preparing the process cost report under FIFO method requires dividing current costs charged to the Work in Process Inventory account of each department or production process by equivalent units to calculate the cost per equivalent unit.

For a company having two or more production departments, at the end of the accounting period a separate process cost report for each department is prepared.

The use of the FIFO method would result in a company's process cost report showing

The Changing Business Environment - a Managers Perspective

Costing Systems- Job Order Costing

Value-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

Pricing Decisions, Incl Target Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

Filters

Exam 3: Costing Systems- Process Costing

In a process costing system, all production costs are assigned to departments.

When the FIFO cost flow assumption is used, the equivalent units will always equal the actual units in beginning work in process inventory, plus the actual units started and completed during the current period plus the percent of ending work in process inventory completed during the current period.

Process costing information can inform managers about the amounts and types of products ordered by specific customers.

The total costs that will be transferred into the Finished Goods Inventory account during the current period are

Production processes that lend themselves to the use of process cost analysis usually have a FIFO product flow within the process.

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

The reason for combining direct labor and overhead costs together and calling them "conversion costs" is that

Because process costing is normally associated with a continuous production flow, products that are in process at the beginning of the period are assumed to be the first completed during the current period.

In a process costing system, percentage-of-completion factors normally are obtained from

One of the steps in preparing the process cost report under FIFO method requires dividing current costs charged to the Work in Process Inventory account of each department or production process by equivalent units to calculate the cost per equivalent unit.

For a company having two or more production departments, at the end of the accounting period a separate process cost report for each department is prepared.

The use of the FIFO method would result in a company's process cost report showing

The Changing Business Environment - a Managers Perspective

Costing Systems- Job Order Costing

Value-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

Pricing Decisions, Incl Target Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

Filters