Deck 14: Topic Focus: Process Costing

Question 1

In a process costing system,all product costs for the period are accumulated and divided evenly over all

Answer 1

True

Question 2

In process costing,direct materials may be added at different points of a department's production process.

Answer 2

True

Question 3

When work is in process at the end of an accounting period,cost accumulation and reporting is extremely easy under process costing,as the product costs are simply added up and divided evenly among the products produced.

Answer 3

False

Question 4

The accounting firm PriceWaterhouseCoopers is an example of a company that would use a process costing system.

Question 5

Companies that mass produce similar products or employ a continuous production process typically use a job order system.

Question 6

Companies that mass produce similar products or employ a continuous production process typically use a process costing system.

Question 7

The journal entries used to record cost flows in a process costing system differ from those used to record cost flows in a job order costing system.

Question 8

Costs incurred in a process costing system include direct material,direct labor and overhead.

Question 9

The inventories used in a process costing system include work-in-process and finished goods,but not raw materials.

Question 10

The costs incurred in a process costing system,direct material,direct labor and manufacturing overhead,are the same as the costs incurred in a job order costing system.

Question 11

Both process costing systems and job order costing systems accumulate costs on a job cost sheet.

Question 12

When there is no work in process inventory at the end of a period,cost accumulation and reporting is extremely easy under process costing,as the product costs are simply added up and divided evenly among the products produced.

Question 13

The soft drink bottler Dr.Pepper is an example of a company that would use a process costing system.

Question 14

The inventories used in a process costing system are the same as those used in a job order costing system.

Question 15

The journal entries used to record cost flows in a process costing system are the same as those used to record cost flows in a job order costing system.

Question 16

Like process costing,job order costing makes no attempt to track an individual product's costs,all the products have similar costs.

Question 17

In process costing,all materials are added at the beginning of the production process,then labor and overhead is added during the production process.

Question 18

In a job order costing system,the costs of each job are accumulated on a job cost sheet,while in process costing,the costs are accumulated by department.

Question 19

In a job order costing system,all product costs for the period are accumulated and divided evenly over all

Question 20

Both the process costing and job order costing systems accumulate product costs throughout the production process and assign those costs to individual

Question 21

Which of the following is a similarity between job order costing and process costing systems?

A)Both accumulate costs on a job cost sheet
B)Both accumulate product costs in each production department during the period
C)Both systems track cost flows from raw materials to work in process,from work in process to finished goods,and from finished goods to cost of goods sold
D)Both produce many different types of products,often to customer specifications

Question 22

In a process costing system,when raw material is received in which of the following balance sheet accounts is it recorded?

A)Raw materials inventory
B)Work in process inventory
C)Finished goods inventory
D)Cost of goods sold

Question 23

In a process costing system,when raw materials are moved into the mixing department,in which of the following balance sheet accounts is it recorded?

A)Raw materials inventory - mixing
B)Work in process inventory - mixing
C)Finished goods inventory - mixing
D)Cost of goods sold

Question 24

Companies that mass-produce similar products or employ a continuous production process typically use which of the following costing systems?

A)Process costing
B)Job order costing
C)Either process or job order costing
D)Neither process nor job order costing

Question 25

In a process costing system,labor and overhead costs are typically combined and referred to as conversion costs.

Question 26

In a job order costing system,the costs of each job are accumulated on a

A)job cost sheet.
B)departmental cost sheet.
C)end-of-job accumulation sheet.
D)company cost sheet.

Question 27

Which of the following types of entities would probably use a process costing system?

A)Automobile repair shop
B)Paint manufacturer
C)Printing company
D)Law firm

Question 28

Which of the following inventory accounts is not used in a process costing system?

A)Work in process
B)Finished goods
C)Cost of goods sold
D)Materials

Question 29

Which of the following types of entities would probably use a process costing system?

A)Construction
B)Ship building
C)Soft drink bottler
D)CPA firm

Question 30

Equivalent units EU of production is based on the percentage of completion for work in process inventory at the end of the period.

Question 31

Which of the following is a similarity between job order costing and process costing systems?

A)Both accumulate product costs throughout the production process and assign those costs to individual units of production
B)Both track individual product costs
C)Both accumulate product costs in each production department during the period
D)Both accumulate costs on a job cost sheet

Question 32

Which of the following types of entities would probably use a process costing system?

A)Oil refiner
B)Construction company
C)Airplane manufacturer
D)CPA firm

Question 33

The costing systems in which all product costs for the period are accumulated and divided evenly over all

A)job order costing system.
B)accumulation costing system.
C)departmental costing system.
D)process costing system.

Question 34

Which of the following is a similarity between job order costing and process costing systems?

A)Both mass-produce identical products
B)Both accumulate direct materials,direct labor and manufacturing overhead costs
C)Both accumulate product cost on a departmental production report
D)None of these answer choices are similarities between job costing and process costing systems.

Question 35

In a process costing system,labor and overhead costs are typically combined and referred to as equivalent costs.

Question 36

What types of costs are incurred in a process costing system?

A)Direct material and direct labor
B)Direct labor and manufacturing overhead
C)Manufacturing overhead and direct material
D)Direct material,direct labor and manufacturing overhead

Question 37

The objective of process costing is the same as job order costing: to assign all costs to specific jobs.

Question 38

Companies that mass-produce similar products or employ a continuous production process typically use which of the following costing systems?

A)Job order
B)Process
C)Accumulation
D)Variable

Question 39

Equivalent units for direct materials and conversion costs should be added separately to total units completed to arrive at the total equivalent units for materials and the total equivalent units for conversion.

Question 40

All of the following types of inventory accounts are used in a process costing system except

A)raw materials.
B)work in process.
C)finished goods.
D)cost of goods sold.

Question 41

Which of the following is not a similarity between job order costing and process costing systems?

A)Both accumulate product costs throughout the production process and assign those costs to individual units of production
B)Both accumulate direct materials,direct labor,and manufacturing overhead costs
C)Both track cost flows from raw materials to work in process,from work in process to finished goods,and from finished goods to cost of goods sold
D)Both transfer the cost of the inventory to cost of goods sold when the production process is completed.

Question 42

On March 31,Morgan Company recorded the following information in the Assembly Department's Work in Process account: Assume that the unfinished

A)$9,856
B)$9,952
C)$12,880
D)$14,480

Question 43

On December 31,Berry Company recorded the following information in the Mixing Department's Work in Process account: Assume that the unfinished

A)$5.18
B)$5.23
C)$5.44
D)$5.55

Question 44

To determine the equivalent

A)multiply the percentage of completion for each cost category by the number of physical units in the ending work in process inventory.
B)divide the percentage of completion for each cost category by the number of physical units in the ending work in process inventory.
C)add the cost of production to beginning work in process inventory and divide this total by the physical units transferred out.
D)multiply the number of physical

Question 45

At the end of January,Monroe Industries had completed 65,000

A)1,600
B)6,400
C)4,800
D)8,000

Question 46

On December 31,Berry Company recorded the following information in the Mixing Department's Work in Process account: Assume that the unfinished

A)$32,640
B)$33,300
C)$51,800
D)$52,300

Question 47

When using a process costing system,the formula to reconcile the physical

A)beginning WIP units + Units started = Units transferred out + Ending WIP units.
B)beginning WIP units + Units transferred out = Units started + Ending WIP units.
C)units started - Beginning WIP units = Units transferred out + Ending WIP units.
D)beginning WIP

Question 48

When using a process costing system,the formula for reconciling the costs of production is

A)beginning WIP balance + Costs transferred out during the period + Ending WIP = Total costs accounted for.
B)beginning WIP balance + Cost added during the period = Cost transferred out during the period + Ending WIP balance.
C)cost added during the period - Beginning WIP balance = Cost transferred out during the period + Ending WIP balance.
D)beginning WIP balance + Cost transferred out - Ending inventory = Total costs to accounted for.

Question 49

Which of the following is not a step in calculating the

A)Calculate the equivalent units of production
B)Allocate the equivalent unit costs of production
C)Divide the total equivalent costs by the total units
D)Reconcile the costs of production

Question 50

The

A)the units may be in different departments at the end of the period.
B)the units may not be at the same stage of completion.
C)the conversion cost may have been added at the beginning of the process.
D)None of these answer choices are correct.

Question 51

When a department has work in process at the end of the period,the incomplete

A)actual units.
B)equivalent units.
C)transferred-in units.
D)None of these answer choices are correct.

Question 52

Which of the following is a difference between job order costing and process costing systems?

A)Companies that use a process costing system accumulate product costs throughout the production process while companies that use a job order costing system accumulate product cost only at the end of the production process.
B)Companies that use a process costing system accumulate product costs in each production department and allocate the costs evenly across all units produced in the department during the period while companies that use job order costing accumulate product costs by job and allocate those costs only to the units in that particular job.
C)Companies that use a process costing system accumulate direct material and direct labor,but not manufacturing overhead while companies that use a job order costing systems accumulate direct material,direct labor and manufacturing overhead.
D)A process costing system would be appropriate for a company that manufactures custom solar panels while a job order costing system would be appropriate for a company which manufactures a line of solar panels.

Question 53

The mixing department of the Glasson Company started the month with 20,000

A)280,000
B)300,000
C)318,000
D)329,000

Question 54

When a department has work in process at the end of the period,we need to determine the percentage of completion for the work in process.Based on that percentage we calculate

A)actual units of production.
B)particular units of production.
C)equivalent units of production.
D)half-

Question 55

Conversion cost consist of

A)direct materials and direct labor.
B)indirect materials and direct materials.
C)direct labor and manufacturing overhead.
D)direct materials and manufacturing overhead.

Question 56

Which of the following is a difference between job order costing and process costing systems?

A)Companies that use a process costing system mass-produce identical products while companies that use a job order costing system produce many different types of products.
B)Companies that use a process costing system accumulate product costs throughout the production process while companies that use a job order costing system accumulate product cost only at the end of the production process.
C)Companies that use a process costing system accumulate direct material and manufacturing overhead,but not direct labor while companies that use a job order costing systems accumulate direct material,direct labor and manufacturing overhead.
D)Companies that use a job order costing system do not accumulate manufacturing overhead as part of the cost of production while companies that use a process costing system do include manufacturing overhead in product cost.

Question 57

Bemis Corporation's Assembly Department had 2,000

A)54,800
B)57,200
C)64,800
D)72,000

Question 58

Which of the following is a difference between job order costing and process costing systems?

A)Companies that use a process costing system accumulate product costs throughout the production process while companies that use a job order costing system accumulate product cost only at the end of the production process.
B)Companies that use a process costing system accumulate direct material and direct labor,but not manufacturing overhead while companies that use a job order costing systems accumulate direct material,direct labor and manufacturing overhead.
C)Companies that use a process costing system accumulate product costs on the departmental production report while companies that use a job order costing system accumulate product costs on the job cost sheet.
D)A process costing system would be appropriate for a winery while a job order costing system would be appropriate for a brewery.

Question 59

Which of the following is not a step in calculating the

A)Calculate the physical unit flow
B)Calculate the equivalent units of production
C)Calculate the cost per equivalent unit
D)Multiply the physical

Question 60

At the end of January,Monroe Industries had completed 65,000

A)66,600
B)68,200
C)69,800
D)71,400

Question 61

Identify which costing method is more likely to be used to accumulate costs for the following products or services by marking an "X" in the appropriate column.

Question 62

In March,Connor's,Inc.completed 150,000
a.How many equivalent units were in Connor's ending work in process inventory?
b.How many equivalent units will be used to calculate the cost per equivalent unit?

Question 63

Stewart Manufacturing uses a process costing system.Information regarding
a.What are the equivalent units for processing costs for the Packaging Department for the month?
b.What is the cost per equivalent unit for the month?

Question 64

Morgan Company reported the following data for the operations of its Mixing Department for the month of July.
Required:
a.Calculate the equivalent units of production for materials and conversion costs.
b.Determine the cost per equivalent unit for materials and conversion costs.
c.Determine the cost of units transferred out of the Mixing Department during the period.
d.Determine the cost of ending work in process inventory in the Mixing Department.

Question 65

Identify which costing method is more likely to be used to accumulate costs for the following products or services by marking an "X" in the appropriate column.

Question 66

Fill in the missing data ignore indirect materials

Question 67

Identify which costing method is described in the statements below by marking an "X" in the appropriate column some items may apply to both.

Question 68

When using a process costing system,explain the steps you use in assigning costs to

Question 69

Identify which costing method is more likely to be used to accumulate costs for the following products or services by marking an "X" in the appropriate column.

Question 70

List three goods or services likely to use a process costing system and three that are likely to use a job order costing system.