Exam 17: Costing Systems: Process Costing

Which of the following is most likely done by managers,when actual costs of a product exceed expected costs?

Like job order costing systems,process costing systems are also only suited for companies that produce customized products.

When the average costing method is used in process costing,all costs incurred by a department or production process are divided by the equivalent units produced during the period to determine the average cost per unit produced.

Direct materials costs and conversion costs for the current period on a FIFO process cost report are divided by their respective units of equivalent production to arrive at the

Equivalent production is a measure of productive output of units for a period of time,expressed in terms of fully completed or equivalent whole units produced.

Process costing information can inform managers about the specific units of products ordered by customers.

Managers prepare process cost reports in the evaluating stage of the management process.

A job order costing system is used by companies that manufacture large amounts of similar products or liquid products.

Equivalent production is also called

Which of the following items most likely would be manufactured using a process costing system?

Weston Company uses the FIFO method in its process costing system.The first processing department,the Welding Department,started the month with 18,000 units in its beginning work in process inventory that were 50 percent complete with respect to conversion costs.The conversion costs in the beginning work in process inventory were $52,200.An additional 55,000 units were started into production during the month.There were 16,000 units in the ending work in process inventory of the Welding Department that were 20 percent complete with respect to conversion costs.A total of $284,160 in conversion costs were incurred in the department during the month.What would be the cost per equivalent unit for conversion costs for the month on the department's process cost report? (Round to three decimal places. )

Use the following data of Daylight Incorporation,a company using a process costing system,to answer the questions below. -The company uses average process costing method. Equivalent units for direct materials of Daylight during the month totaled

Process costing is applicable to production operations that

A company should use process costing rather than job order costing if

For a paint manufacturing company,the cost of producing each gallon of paint will likely differ.

When the FIFO costing method is used in process costing,the number of units in beginning inventory is multiplied by 100 percent to determine the equivalent units.

Nader Inc.has the following information available: At the beginning of the period,there were 500 units in process that were 40 percent complete as to conversion costs and 100 percent complete as to direct materials costs.During the current period,4,300 units were started and completed.Ending inventory contained 320 units that were 80 percent complete as to conversion costs and 100 percent complete as to direct materials costs.(Assume that the company uses the FIFO costing method. ) -The cost of completing a unit of Nader Inc.during the current period was

In a process costing system,total period costs incurred by a company are traced to individual processes.

The product unit cost is the sum of the cost elements added in all production department processes.

The average costing method in process costing disregards the ending inventory assuming that direct material costs and conversion costs are pertaining to the immediate next period.