Question 1

The weighted-average method of computing equivalent units assumes that products are at the same point of completion for both materials and conversion costs.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is correct concerning the number of work in process accounts used by job order and process cost systems?

Accepted Answer

A)  Job Order = several; Process Cost = one
B)  Job Order = one control account for each job; Process Cost = one for each process
C)  Job Order = one control account; Process Cost = one for each process
D)  Job Order = none; Process Cost = severalE) None of the above
F) A) and B)

Question 3

When material costs and conversion costs do not occur in the same process at the same time, the weighted average method cannot be used effectively.

Accepted Answer

A) True 
 B)False

Question 4

When goods are completed, the entry to record the transfer of the goods out of the last department includes a debit to Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 5

Zargus Company began the month of June with 1,650 units in beginning work in process, 11,400 units started into production, and 500 units in ending work in process that are 30% completed.How many units were transferred out during June?

Accepted Answer

A)  12,550
B)  12,050
C)  11,550
D)  11,250E) A) and B)
F) A) and C)

Question 6

More frequent materials requisitions are generally required in a process cost system than in a job order cost system.

Accepted Answer

A) True 
 B)False

Question 7

Companies often use a combination of a process cost and a job order cost system, called job process costing.

Accepted Answer

A) True 
 B)False

Question 8

Production of Mountain Dew would likely be done using a process cost system.

Accepted Answer

A) True 
 B)False

Question 9

The flow of costs in a process costing system requires that materials, labour, and overhead be added in equal amounts in each process or department involved to complete the product.

Accepted Answer

A) True 
 B)False

Question 10

Conversion cost is another name for manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 11

For which one of the following would a process cost system most likely be used?

Accepted Answer

A)  Custom furniture
B)  Potato chips
C)  Motion pictures
D)  Cruise shipsE) All of the above
F) A) and D)

Question 12

Why are materials requisition forms used less frequently in process costing?

Accepted Answer

A)  Materials are rarely used in production.
B)  Requisitions are for larger quantities so fewer orders are needed.
C)  Materials are only added at the beginning of production.
D)  There are no materials inventories because process costing uses a just in time system.E) All of the above
F) A) and D)

Question 13

In a process cost system, total costs are determinable at any point in time by examining the account balances.

Accepted Answer

A) True 
 B)False

Question 14

When is a process cost accounting system most appropriate?

Accepted Answer

A)  When mass produced products are manufactured that are very similar in nature
B)  When a company produces multiple jobs within the same accounting period
C)  When companies produce uniquely different products
D)  When a variety of different products are produced, each one requiring different types of material, labour, and overheadE) A) and B)
F) B) and D)

Question 15

Which one of the following will appear as a credit in the Work in Process account of a first department in a two stage production process?

Accepted Answer

A)  Materials used
B)  Overhead applied
C)  Cost of goods sold
D)  Cost of products transferred into the second departmentE) B) and D)
F) A) and B)

Question 16

Why is it necessary to calculate equivalent units of production in a department?

Accepted Answer

A)  A physical count of units is impossible.
B)  A company may transfer numerous batches out during the year.
C)  The physical units in the department are always 100% complete.
D)  Some units worked on in the department are not fully complete.E) A) and B)
F) B) and D)

Question 17

One work in process account is used in a process cost system.

Accepted Answer

A) True 
 B)False

Question 18

Equivalent units of production are used to determine the cost per unit of all products, whether completed or not.

Accepted Answer

A) True 
 B)False

Question 19

What are physical units?

Accepted Answer

A)  The actual units to be accounted for during a period.
B)  The pro-rata portion of units completed during the period.
C)  Units in process at the end of the period.
D)  The total units completed and transferred out during the period.E) None of the above
F) B) and D)

Question 20

Which group of the following manufacturing cost elements occurs in a process cost system?

Accepted Answer

A)  Direct labour and conversion costs
B)  Direct labour and direct material
C)  Manufacturing overhead and conversion costs
D)  Direct materials, direct labour, and manufacturing overheadE) A) and D)
F) A) and C)

Exam 4: Process Costing

Companies often use a combination of a process cost and a job order cost system, called job process costing.

Correct AnswerverifiedShow Answer

Equivalent units of production are used to determine the cost per unit of all products, whether completed or not.

Correct AnswerverifiedShow Answer

Zargus Company began the month of June with 1,650 units in beginning work in process, 11,400 units started into production, and 500 units in ending work in process that are 30% completed.How many units were transferred out during June?

Correct AnswerverifiedShow Answer

More frequent materials requisitions are generally required in a process cost system than in a job order cost system.

Correct AnswerverifiedShow Answer

Why is it necessary to calculate equivalent units of production in a department?

Correct AnswerverifiedShow Answer

What are physical units?

Correct AnswerverifiedShow Answer

When goods are completed, the entry to record the transfer of the goods out of the last department includes a debit to Cost of Goods Sold.

Correct AnswerverifiedShow Answer

When material costs and conversion costs do not occur in the same process at the same time, the weighted average method cannot be used effectively.

Correct AnswerverifiedShow Answer

Production of Mountain Dew would likely be done using a process cost system.

Correct AnswerverifiedShow Answer

Which one of the following will appear as a credit in the Work in Process account of a first department in a two stage production process?

Correct AnswerverifiedShow Answer

The weighted-average method of computing equivalent units assumes that products are at the same point of completion for both materials and conversion costs.

Correct AnswerverifiedShow Answer

Why are materials requisition forms used less frequently in process costing?

Correct AnswerverifiedShow Answer

One work in process account is used in a process cost system.

Correct AnswerverifiedShow Answer

Conversion cost is another name for manufacturing overhead.

Correct AnswerverifiedShow Answer

For which one of the following would a process cost system most likely be used?

Correct AnswerverifiedShow Answer

Which of the following is correct concerning the number of work in process accounts used by job order and process cost systems?

Correct AnswerverifiedShow Answer

The flow of costs in a process costing system requires that materials, labour, and overhead be added in equal amounts in each process or department involved to complete the product.

Correct AnswerverifiedShow Answer

When is a process cost accounting system most appropriate?

Correct AnswerverifiedShow Answer

In a process cost system, total costs are determinable at any point in time by examining the account balances.

Correct AnswerverifiedShow Answer

Which group of the following manufacturing cost elements occurs in a process cost system?

Correct AnswerverifiedShow Answer

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