Question 1

To calculate equivalent units,multiply the partially completed physical units in the process by the percentage of completion.

Accepted Answer

A) True 
 B)False

Question 2

In which of the following ways is abnormal spoilage accounted for?

Accepted Answer

A)  Expensed in the period in which it occurred 
B)  Included as part of the unit cost of output 
C)  Written off to cost of goods sold 
D)  Included in inventory valuation until year-end and then written off 
A)  Expensed in the period in which it occurred 
B)  Included as part of the unit cost of output 
C)  Written off to cost of goods sold 
D)  Included in inventory valuation until year-end and then written off

Question 3

In both job and process costing,the journal entry to record cost of goods sold is as follows.

Accepted Answer

A)  Debit finished goods inventory and credit cost of goods sold. 
B)  Debit finished goods inventory and credit work in process. 
C)  Debit cost of goods sold and credit work in process. 
D)  Debit cost of goods sold and credit finished goods inventory. 
A)  Debit finished goods inventory and credit cost of goods sold. 
B)  Debit finished goods inventory and credit work in process. 
C)  Debit cost of goods sold and credit work in process. 
D)  Debit cost of goods sold and credit finished goods inventory.

Question 4

South River Chemicals Pty Ltd manufactures a product called Zybek.Direct materials are added at the beginning of the process and conversion activity occurs uniformly throughout the process.The following data pertains to the month of May.Using the weighted average method of process costing,calculate the equivalent units of direct materials and conversion costs for the month of May.

Accepted Answer

A)  DM 75 000;CC 69 400 
B)  DM 75 000;CC 60 400 
C)  DM 60 000;CC 60 400 
D)  DM 68 000;CC 69 400 
A)  DM 75 000;CC 69 400 
B)  DM 75 000;CC 60 400 
C)  DM 60 000;CC 60 400 
D)  DM 68 000;CC 69 400

Question 5

The major difference between weighted average and FIFO is:

Accepted Answer

A)  how completed and transferred units are treated. 
B)  how ending inventory is treated. 
C)  how beginning inventory is treated. 
D)  how current period costs are treated. 
A)  how completed and transferred units are treated. 
B)  how ending inventory is treated. 
C)  how beginning inventory is treated. 
D)  how current period costs are treated.

Question 6

Banana Shirts produces t-shirts in large batches.Most of its t-shirts are made of regular cotton,although some are made from ethically produced cotton.The manufacturing process is relatively simple;most t-shirts go through similar processes;the main difference is whether the t-shirt requires embroidery or printing.The most appropriate costing system for Banana Shirts is:

Accepted Answer

A)  Process costing system 
B)  Job costing system. 
C)  Operation costing systems. 
D)  Both job costing system and operation costing system are appropriate. 
A)  Process costing system 
B)  Job costing system. 
C)  Operation costing systems. 
D)  Both job costing system and operation costing system are appropriate.

Question 7

Latta Coffee Ltd has two main processes: roasting and packaging.Roasted coffee beans are transferred to the packaging department before the final product is shipped to customers.The following information for the month of April for the Roasting department is available: total cost of goods completed and transferred from Roasting department to Packaging department is $25 000;ending work in progress in April is $1000;number of equivalent units of conversion is $5000 units.Which of the following journal entries is appropriate at the end of April?

Accepted Answer

A)  Debit Packaging Department $26 000,Credit Roasting Department $26 000 
B)  Debit Packaging Department $25 000,Credit Roasting Department $25 000 
C)  Debit Roasting Department $26 000,Credit Packaging Department $26 000 
D)  Debit Roasting Department $25 000,Credit Packaging Department $25 000 
A)  Debit Packaging Department $26 000,Credit Roasting Department $26 000 
B)  Debit Packaging Department $25 000,Credit Roasting Department $25 000 
C)  Debit Roasting Department $26 000,Credit Packaging Department $26 000 
D)  Debit Roasting Department $25 000,Credit Packaging Department $25 000

Question 8

Assuming that there was no beginning work in process inventory and the ending work in process inventory is 50 per cent complete as to conversion costs,the number of equivalent units as to conversion costs would be:

Accepted Answer

A)  The same as the units completed. 
B)  The same as the units placed in process. 
C)  Less than the units completed. 
D)  Less than the units placed in process. 
A)  The same as the units completed. 
B)  The same as the units placed in process. 
C)  Less than the units completed. 
D)  Less than the units placed in process.

Question 9

Softcloth Textile Pty Ltd manufactures a variety of fabrics.The Weaving Department had 1000 units in work in process on April 1,which were 20 per cent complete as to conversion costs.During April,8000 units were completed and transferred.On April 30,4000 units remained in work in process 50 per cent complete as to conversion costs.Using the FIFO method of process costing,calculate the equivalent units of conversion for the month of April.

Accepted Answer

A)  9000 
B)  9800 
C)  10 000 
D)  12 000 
A)  9000 
B)  9800 
C)  10 000 
D)  12 000

Question 10

Raphael's Refining uses a weighted average process costing system.For a particular period,its opening inventory consisted of 100 items (60 per cent complete as to conversion costs)whose costs were $1600 made up of material $300 and conversion cost $1300.During the month,1000 items were started and 950 were completed.Ending inventory of WIP was complete.There was no spoilage.Costs placed in process during the month were materials $1600 and conversion costs $13 700.Materials are added at the halfway point.What is the amount of cost that would be allocated to goods completed in the period?

Accepted Answer

A)  $14 615 
B)  $16 513 
C)  $16 900 
D)  $16 150 
A)  $14 615 
B)  $16 513 
C)  $16 900 
D)  $16 150

Question 11

Which of the following represents a correct sequence in preparing a departmental production report?

Accepted Answer

A)  Analysis of physical flow of units,computation of unit costs,calculation of equivalent units and analysis of total costs 
B)  Analysis of physical flow of units,calculation of equivalent units,computation of unit costs and analysis of total costs 
C)  Analysis of total costs,calculation of equivalent units,computation of unit costs and analysis of physical flow of units 
D)  Analysis of total costs,analysis of physical flow of units,computation of unit costs and calculation of equivalent units 
A)  Analysis of physical flow of units,computation of unit costs,calculation of equivalent units and analysis of total costs 
B)  Analysis of physical flow of units,calculation of equivalent units,computation of unit costs and analysis of total costs 
C)  Analysis of total costs,calculation of equivalent units,computation of unit costs and analysis of physical flow of units 
D)  Analysis of total costs,analysis of physical flow of units,computation of unit costs and calculation of equivalent units

Question 12

Collins Chemicals produces a compound through two processes.For its second process for a particular period,Collins had an opening WIP inventory of 100 units halfway through the process;2300 units completed in the period;and a closing WIP inventory of 400 units ¾ of the way through the process.Materials are added at the beginning of the process and conversion costs are incurred uniformly.Calculate the equivalent units for transferred in costs for the period if the firm used weighted average costing.

Accepted Answer

A)  2300 
B)  2500 
C)  2600 
D)  2700 
A)  2300 
B)  2500 
C)  2600 
D)  2700

Question 13

Collins Chemicals produces a compound through two processes.For its second process for a particular period,Collins had an opening WIP inventory of 100 units halfway through the process;2300 units completed in the period;and a closing WIP inventory of 400 units ¾ of the way through the process.Materials are added at the beginning of the process and conversion costs are incurred uniformly.Calculate the equivalent units for transferred in costs for the period if the firm used FIFO costing.

Accepted Answer

A)  2300 
B)  2400 
C)  2500 
D)  2600 
A)  2300 
B)  2400 
C)  2500 
D)  2600

Question 14

Under Australian accounting standards,which methods can be used to prepare the departmental production report?

Accepted Answer

A)  Weighted average,first in first out and standard costing 
B)  Last in first out,first in first out and standard costing 
C)  Last in first out,standard costing,weighted average 
D)  First in first out,last in first out,weighted average and standard costing 
A)  Weighted average,first in first out and standard costing 
B)  Last in first out,first in first out and standard costing 
C)  Last in first out,standard costing,weighted average 
D)  First in first out,last in first out,weighted average and standard costing

Question 15

Operational costing is appropriate where:
i.there are different material inputs
ii.there are common material inputs
iii.processes are identical
iv.different combinations of specific processes apply to different products

Accepted Answer

A)  i and ii 
B)  ii and iii 
C)  ii and iv 
D)  i and iv 
A)  i and ii 
B)  ii and iii 
C)  ii and iv 
D)  i and iv

Question 16

Operation costing is just another name for process costing as both systems trace all production costs to processes or departments.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following represents the production units used to calculate equivalent units under the weighted average method?

Accepted Answer

A)  Work to date on ending work in process + units started and completed. 
B)  All units completed + work to date on ending work in process. 
C)  Work to complete beginning work in process + work to date on ending work in process. 
D)  Work to complete beginning work in process + units completed ­- work done on ending work in process. 
A)  Work to date on ending work in process + units started and completed. 
B)  All units completed + work to date on ending work in process. 
C)  Work to complete beginning work in process + work to date on ending work in process. 
D)  Work to complete beginning work in process + units completed ­- work done on ending work in process.

Question 18

The technical term for costs moving between one department and the next in a multidepartment process is:

Accepted Answer

A)  transferred costs. 
B)  transferred out costs. 
C)  transferred in costs. 
D)  prior costs. 
A)  transferred costs. 
B)  transferred out costs. 
C)  transferred in costs. 
D)  prior costs.

Question 19

Normal spoilage can always be avoided by a more efficient approach to production.

Accepted Answer

A) True 
 B)False

Question 20

If the FIFO method is used,the cost of beginning work in process should be included in:
Unit Cost
Cost of units transferred out

Accepted Answer

A)  No
Yes 
B)  No
No 
C)  Yes
No 
D)  Yes
Yes 
A)  No
Yes 
B)  No
No 
C)  Yes
No 
D)  Yes
Yes

To calculate equivalent units,multiply the partially completed physical units in the process by the percentage of completion.

In which of the following ways is abnormal spoilage accounted for?

In both job and process costing,the journal entry to record cost of goods sold is as follows.

The major difference between weighted average and FIFO is:

Assuming that there was no beginning work in process inventory and the ending work in process inventory is 50 per cent complete as to conversion costs,the number of equivalent units as to conversion costs would be:

Which of the following represents a correct sequence in preparing a departmental production report?

Under Australian accounting standards,which methods can be used to prepare the departmental production report?

Operational costing is appropriate where: i.there are different material inputs ii.there are common material inputs iii.processes are identical iv.different combinations of specific processes apply to different products

Operation costing is just another name for process costing as both systems trace all production costs to processes or departments.

Which of the following represents the production units used to calculate equivalent units under the weighted average method?

The technical term for costs moving between one department and the next in a multidepartment process is:

Normal spoilage can always be avoided by a more efficient approach to production.

If the FIFO method is used,the cost of beginning work in process should be included in: Unit Cost Cost of units transferred out

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters

Exam 5: Process Costing and Operation Costing

To calculate equivalent units,multiply the partially completed physical units in the process by the percentage of completion.

In which of the following ways is abnormal spoilage accounted for?

In both job and process costing,the journal entry to record cost of goods sold is as follows.

The major difference between weighted average and FIFO is:

Assuming that there was no beginning work in process inventory and the ending work in process inventory is 50 per cent complete as to conversion costs,the number of equivalent units as to conversion costs would be:

Which of the following represents a correct sequence in preparing a departmental production report?

Under Australian accounting standards,which methods can be used to prepare the departmental production report?

Operational costing is appropriate where: i.there are different material inputs ii.there are common material inputs iii.processes are identical iv.different combinations of specific processes apply to different products

Operation costing is just another name for process costing as both systems trace all production costs to processes or departments.

Which of the following represents the production units used to calculate equivalent units under the weighted average method?

The technical term for costs moving between one department and the next in a multidepartment process is:

Normal spoilage can always be avoided by a more efficient approach to production.

If the FIFO method is used,the cost of beginning work in process should be included in: Unit Cost Cost of units transferred out

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters