Chapter 18

Question 1

True or False: Calculating work done for direct materials is easy because it is either 100% used or not used at all.

Answer 1

True

Question 2

What is an equivalent unit (EU)?

Answer 2

Equivalent units (EU) is a way to measure partially completed products as if they were fully completed.

Question 3

True or False: Prime cost pool is made up of direct materials and direct labour

Answer 3

False:
Direct labour is part of the conversion cost pool with manufacturing overhead.

Question 4

While all three methods are ASPE/IFRS compliant, when all things are equal, which method is the most effective and efficient for internal reporting?

Answer 4

Standard Costing

Question 5

If either: Small amounts of WIP inventories or constant amounts of WIP from period to period exists, then there is no difference between which two methods?

Answer 5

First-in, First-out & Weighted-average