Question 1

In a process costing system, equivalent units must be calculated separately for materials and conversion costs.

Accepted Answer

A) True 
 B)False

Question 2

Under the first-in, first-out (FIFO) method, the current-period equivalent units of production for transferred in units in beginning inventory is zero because:

Accepted Answer

A)  these units are transferred back to the previous department for further processing in the current period. 
B)  these units are expected to be sold by the receiving department without subjecting them to further processing. 
C)  no additional costs for these units were transferred in this period. 
D)  costs involved in inter-departmental transfers are accounted for only once when sales are made to customers.

Question 3

Direct labor costs are accumulated in the Manufacturing Overhead account.

Accepted Answer

A) True 
 B)False

Exam 20: Process Costing

In a process costing system, equivalent units must be calculated separately for materials and conversion costs.

Under the first-in, first-out (FIFO) method, the current-period equivalent units of production for transferred in units in beginning inventory is zero because:

Direct labor costs are accumulated in the Manufacturing Overhead account.