Question 1

A process costing system is highly desirable when a company mass produces identical goods.

Accepted Answer

A) True 
 B)False

Question 2

The total cost of the 10,000 cases transferred to finished goods in May was $__________.

Accepted Answer

The answer of The total cost of the 10,000 cases...

Question 3

The unit cost per can of soup transferred to the finished goods warehouse during March was:

Accepted Answer

A)  $0.05. 
B)  $0.42. 
C)  $0.37. 
D)  $1.71. 
A)  $0.05. 
B)  $0.42. 
C)  $0.37. 
D)  $1.71.

Question 4

Equivalent units
What is meant by the term equivalent full units? How is this concept used in computing average unit costs?

Accepted Answer

Equivalent full units is a measure of th

Question 5

Equivalent units of production are:

Accepted Answer

A)  A measure representing the percentage of a unit's cost that has been completed. 
B)  Not computed separately for each input added during production. 
C)  Not assigned to beginning work-in-process or ending work-in-process. 
D)  The total units completed during the period. 
A)  A measure representing the percentage of a unit's cost that has been completed. 
B)  Not computed separately for each input added during production. 
C)  Not assigned to beginning work-in-process or ending work-in-process. 
D)  The total units completed during the period.

Question 6

Indicate which of the following phrases correctly complete this sentence: "Equivalent units of production."

Accepted Answer

A)  Is not a measure of the work done during a given accounting period. 
B)  Do not represent those units completed during the period and transferred out of the Production Department. 
C)  Are used as the basis for determining per-unit manufacturing costs in a process costing accounting system. 
D)  Equivalent units are not computed separately for each significant input consumed in the production process. 
A)  Is not a measure of the work done during a given accounting period. 
B)  Do not represent those units completed during the period and transferred out of the Production Department. 
C)  Are used as the basis for determining per-unit manufacturing costs in a process costing accounting system. 
D)  Equivalent units are not computed separately for each significant input consumed in the production process.

Question 7

In either a job order or a process costing system, credits to the Materials Inventory account represent:

Accepted Answer

A)  The cost of materials purchased during the period. 
B)  The cost of materials relating to finished goods. 
C)  The cost of unused materials returned to the inventory. 
D)  The cost of materials placed into production. 
A)  The cost of materials purchased during the period. 
B)  The cost of materials relating to finished goods. 
C)  The cost of unused materials returned to the inventory. 
D)  The cost of materials placed into production.

Question 8

The unit cost per gallon of mustard processed by the Mixing Department in May was $__________.

Accepted Answer

The answer of The unit cost per gallon of mustard...

Question 9

Conversion costs include direct labor and overhead costs and direct materials associated with converting units so that they can be transferred out of Work-in-Process.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following businesses would most likely use process costing?

Accepted Answer

A)  Law firm. 
B)  Maker of frozen orange juice. 
C)  A brewery. 
D)  An oil refinery. 
A)  Law firm. 
B)  Maker of frozen orange juice. 
C)  A brewery. 
D)  An oil refinery.

Question 11

During the month of June, $352,150 of costs were transferred from Department A to Department B. The journal entry to summarize the transfer of these costs includes:

Accepted Answer

A)  A debit to department A for $352,150. 
B)  A credit to department B for $352,150. 
C)  A credit to department A for $352,150. 
D)  No entry is required when costs are transferred between departments. 
A)  A debit to department A for $352,150. 
B)  A credit to department B for $352,150. 
C)  A credit to department A for $352,150. 
D)  No entry is required when costs are transferred between departments.

Question 12

As companies become more automated, overhead costs increase and direct labor costs decrease.

Accepted Answer

A) True 
 B)False

Question 13

Companies that compute equivalent full units of production do so to:

Accepted Answer

A)  Comply with income tax regulations. 
B)  Compute total manufacturing costs for the period. 
C)  Determine a manufacturing overhead application rate. 
D)  Determine departmental per-unit costs. 
A)  Comply with income tax regulations. 
B)  Compute total manufacturing costs for the period. 
C)  Determine a manufacturing overhead application rate. 
D)  Determine departmental per-unit costs.

Question 14

How many units were started in June?

Accepted Answer

A)  92,000. 
B)  60,000. 
C)  160,000. 
D)  110,000. 
A)  92,000. 
B)  60,000. 
C)  160,000. 
D)  110,000.

Question 15

If 80% of all inventory was sold at $32 per unit and 3,500 units were sold, what is the cost of the finished goods inventory at year-end?

Accepted Answer

A)  $16,800. 
B)  $77,000. 
C)  $19,250. 
D)  $96,250. 
A)  $16,800. 
B)  $77,000. 
C)  $19,250. 
D)  $96,250.

Question 16

Equivalent full units of production represent units of:

Accepted Answer

A)  Finished goods inventory. 
B)  Units of work-in-process inventory. 
C)  Work performed during the period. 
D)  Sales generated during the period. 
A)  Finished goods inventory. 
B)  Units of work-in-process inventory. 
C)  Work performed during the period. 
D)  Sales generated during the period.

Question 17

The assembly department has 750 units in work-in-process at the beginning of November. By the end of November, it had completed and transferred 2,800 units to the paint department. On November 30, there were 400 units remaining in work-in-process. How many units were started in production in the assembly department during November?

Accepted Answer

A)  3,650. 
B)  3,050. 
C)  2,450. 
D)  1,750. 
A)  3,650. 
B)  3,050. 
C)  2,450. 
D)  1,750.

Question 18

If there is no over- or underapplied overhead, equivalent units of production will equal the exact number of units actually produced.

Accepted Answer

A) True 
 B)False

Question 19

The total cost of all cases transferred to finished goods in May was:

Accepted Answer

A)  $74,200. 
B)  $69,000. 
C)  $63,600. 
D)  Some other amount. 
A)  $74,200. 
B)  $69,000. 
C)  $63,600. 
D)  Some other amount.

Question 20

Department X of a manufacturing company works on only one product, and all costs are incurred uniformly as the product goes along the assembly line. The 8,000 units in process on December 1 were 60% completed. An additional 50,000 units were placed in production during December. At December 31, the 10,000 units in process were 60% completed. The equivalent full units of production during December amounted to:

Accepted Answer

A)  49,200. 
B)  60,800. 
C)  57,200. 
D)  58,800. 
A)  49,200. 
B)  60,800. 
C)  57,200. 
D)  58,800.

Exam 18: Process Costing

A process costing system is highly desirable when a company mass produces identical goods.

The total cost of the 10,000 cases transferred to finished goods in May was $__________.

The unit cost per can of soup transferred to the finished goods warehouse during March was:

Equivalent units What is meant by the term equivalent full units? How is this concept used in computing average unit costs?

Equivalent units of production are:

Indicate which of the following phrases correctly complete this sentence: "Equivalent units of production."

In either a job order or a process costing system, credits to the Materials Inventory account represent:

The unit cost per gallon of mustard processed by the Mixing Department in May was $__________.

Conversion costs include direct labor and overhead costs and direct materials associated with converting units so that they can be transferred out of Work-in-Process.

Which of the following businesses would most likely use process costing?

During the month of June, $352,150 of costs were transferred from Department A to Department B. The journal entry to summarize the transfer of these costs includes:

As companies become more automated, overhead costs increase and direct labor costs decrease.

Companies that compute equivalent full units of production do so to:

How many units were started in June?

If 80% of all inventory was sold at $32 per unit and 3,500 units were sold, what is the cost of the finished goods inventory at year-end?

Equivalent full units of production represent units of:

If there is no over- or underapplied overhead, equivalent units of production will equal the exact number of units actually produced.

The total cost of all cases transferred to finished goods in May was:

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values Answer Key

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