Question 1

The sum of direct labour and factory overhead is referred to as

Accepted Answer

A)  period costs. 
B)  conversion costs. 
C)  prime costs. 
D)  direct product costs. 
A)  period costs. 
B)  conversion costs. 
C)  prime costs. 
D)  direct product costs.

Question 2

Beginning inventory for the month contained 2,000 units that were 70 per cent complete with respect to materials. During the month, 60,000 units were completed and transferred out. Ending inventory contained 3,000 units, 20 per cent complete with respect to materials. The weighted average equivalent units of production for materials for the month would be

Accepted Answer

A)  62,400 
B)  63,000 
C)  60,600 
D)  60,000 
A)  62,400 
B)  63,000 
C)  60,600 
D)  60,000

Question 3

The following information is provided: Units
Work in progress, June 1 (20% complete)
4,000
Started in June
32,000
Work in process, June 30 (30% complete)
12,000
Materials are added at the beginning of the process.
Equivalent units of production for conversion costs using the weighted average method would be

Accepted Answer

A)  35,600. 
B)  34,800. 
C)  36,000. 
D)  27,600. 
A)  35,600. 
B)  34,800. 
C)  36,000. 
D)  27,600.

Question 4

Nortfont Industries had 25,000 units in production during the period just ended. Equivalent units of production were calculated at 24,000; 22,000 units were completed and transferred to finished goods. Cost associated with the beginning inventory was £125,000. Manufacturing costs totaling £850,000 were added during the period. Nortfont uses the weighted average cost method. Nortfont's cost per unit was

Accepted Answer

A)  £34.00. 
B)  £39.00. 
C)  £40.63. 
D)  £38.64. 
A)  £34.00. 
B)  £39.00. 
C)  £40.63. 
D)  £38.64.

Question 5

If the cost of materials increased from January to February and there is beginning inventory for each month, which of the following statements would be true? (Assume all other factors are held constant.)

Accepted Answer

A)  Only the weighted average method would result in an increase in the unit cost for February. 
B)  Only the FIFO method would result in an increase in the unit cost for February. 
C)  Both the weighted average method and the FIFO method would result in an increase in the unit cost for February; however, the weighted average method would result in a greater unit cost for units in February than the FIFO method. 
D)  Both the weighted average method and the FIFO method would result in an increase in the unit cost for February; however, the FIFO method would result in a greater unit cost for units in February than the weighted average method. 
A)  Only the weighted average method would result in an increase in the unit cost for February. 
B)  Only the FIFO method would result in an increase in the unit cost for February. 
C)  Both the weighted average method and the FIFO method would result in an increase in the unit cost for February; however, the weighted average method would result in a greater unit cost for units in February than the FIFO method. 
D)  Both the weighted average method and the FIFO method would result in an increase in the unit cost for February; however, the FIFO method would result in a greater unit cost for units in February than the weighted average method.

Question 6

The cost per equivalent unit using the weighted average method is calculated as

Accepted Answer

A)  Total costs to account for/Equivalent units. 
B)  Costs added during the period/Equivalent units. 
C)  Total costs to account for/Number of partially completed units. 
D)  Costs added during the period/Number of partially completed units. 
A)  Total costs to account for/Equivalent units. 
B)  Costs added during the period/Equivalent units. 
C)  Total costs to account for/Number of partially completed units. 
D)  Costs added during the period/Number of partially completed units.

Question 7

Simplicity is the main advantage of which of the following process costing methods?

Accepted Answer

A)  weighted average 
B)  LIFO 
C)  FIFO 
D)  specific identification 
A)  weighted average 
B)  LIFO 
C)  FIFO 
D)  specific identification

Question 8

The two methods used to determine equivalent units of production are

Accepted Answer

A)  weighted average and FIFO. 
B)  weighted average and LIFO. 
C)  FIFO and LIFO. 
D)  FIFO and specific identification. 
A)  weighted average and FIFO. 
B)  weighted average and LIFO. 
C)  FIFO and LIFO. 
D)  FIFO and specific identification.

Question 9

If the cost of materials decreased from June to July, which of the following statements would be true? (Assume all other factors are held constant.)

Accepted Answer

A)  Only the FIFO method would result in a decrease in the unit cost for July. 
B)  Only the weighted average method would result in a decrease in the unit cost for July. 
C)  Both the weighted average method and the FIFO method would result in a decrease in the unit cost for July; however, the FIFO method would result in a lower unit cost for units in July than the weighted average method. 
D)  Both the weighted average method and the FIFO method would result in a decrease in the unit cost for July; however, the weighted average method would result in a lower unit cost for units in July than the FIFO method. 
A)  Only the FIFO method would result in a decrease in the unit cost for July. 
B)  Only the weighted average method would result in a decrease in the unit cost for July. 
C)  Both the weighted average method and the FIFO method would result in a decrease in the unit cost for July; however, the FIFO method would result in a lower unit cost for units in July than the weighted average method. 
D)  Both the weighted average method and the FIFO method would result in a decrease in the unit cost for July; however, the weighted average method would result in a lower unit cost for units in July than the FIFO method.

The sum of direct labour and factory overhead is referred to as

If the cost of materials increased from January to February and there is beginning inventory for each month, which of the following statements would be true? (Assume all other factors are held constant.)

The cost per equivalent unit using the weighted average method is calculated as

Simplicity is the main advantage of which of the following process costing methods?

The two methods used to determine equivalent units of production are

If the cost of materials decreased from June to July, which of the following statements would be true? (Assume all other factors are held constant.)

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost Assignment

Accounting Entries for a Job Costing System

Joint and By-Product Costing

Income Effects of Alternative Cost Accumulation Systems

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Activity-Based Costing

Pricing Decisions and Profitability Analysis

Decision-Making Under Conditions of Risk and Uncertainty

Capital Investment Decisions: Appraisal Methods

Capital Investment Decisions: the Impact of Capital Rationing, Taxation, Inflation and Risk

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis 1

Standard Costing and Variance Analysis 2: Further Aspects

Divisional Financial Performance Measures

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Management Accounting

Cost Estimation and Cost Behaviour

Quantitative Models for the Planning and Control of Stocks

The Application of Linear Programming to Management Accounting

Filters

Exam 5: Process Costing

The sum of direct labour and factory overhead is referred to as

If the cost of materials increased from January to February and there is beginning inventory for each month, which of the following statements would be true? (Assume all other factors are held constant.)

The cost per equivalent unit using the weighted average method is calculated as

Simplicity is the main advantage of which of the following process costing methods?

The two methods used to determine equivalent units of production are

If the cost of materials decreased from June to July, which of the following statements would be true? (Assume all other factors are held constant.)

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost Assignment

Accounting Entries for a Job Costing System

Joint and By-Product Costing

Income Effects of Alternative Cost Accumulation Systems

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Activity-Based Costing

Pricing Decisions and Profitability Analysis

Decision-Making Under Conditions of Risk and Uncertainty

Capital Investment Decisions: Appraisal Methods

Capital Investment Decisions: the Impact of Capital Rationing, Taxation, Inflation and Risk

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis 1

Standard Costing and Variance Analysis 2: Further Aspects

Divisional Financial Performance Measures

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Management Accounting

Cost Estimation and Cost Behaviour

Quantitative Models for the Planning and Control of Stocks

The Application of Linear Programming to Management Accounting

Filters