Chapter 3 Flashcards
Which of the following statements is true of process costing?
A) It uses one Work-in-Process Inventory account.
B) It tracks and assigns both period costs and product costs to units produced.
C) It accumulates product costs by production departments.
D) It assigns manufacturing overhead costs to products only in the last production process.
C
A characteristic of products that are produced in a series of steps or processes is that ________.
A) their costs are accumulated on a job cost record
B) they are homogeneous and made in large quantities
C) their costs are transferred to Finished Goods Inventory as jobs are completed
D) their costs are accounted for in one Work-in-Process Inventory account
B
Which of the following businesses is most likely to use a job order costing system?
A) paint manufacture
B) potato chip manufacture
C) soft drink bottlers
D) an accounting firm
D
Conversion costs include ________.
direct labor and manufacturing overhead costs
If 54,000 units are 60% complete with respect to direct materials, then the equivalent units of production for direct materials are ________. The weighted-average method is used.
32,400 units
Which of the following is a step in the preparation of a production cost report?
A) assignment of costs to units completed and units in process
B) summarization of the flow of physical units to the suppliers
C) computation of expected units of production
D) computation of amount of materials required for production
A) assignment of costs to units completed and units in process
Under process costing, the number of units to account for must always be ________ the number of units accounted for.
equal to
Using the weighted-average method, to get the cost per equivalent unit of production for direct materials, divide the total direct materials costs by the ________.
equivalent units of production for direct materials
The cost of materials for beginning work-in-process is $10,700. Materials costs added during the period were $131,300. The equivalent units of production for materials is 54,000 units. Using the weighted-average method, what is the cost per equivalent unit for materials?
$2.63
The Assembly Department of ByteSize, Inc., manufacturer of computers, incurred $250,000 in direct material costs and $90,000 in conversion costs. The equivalent units of production for direct materials and conversion costs are 1,000 and 700, respectively. The weighted-average method is used. The cost per equivalent unit of production (EUP) for conversion costs is ________. (Round your answer to the nearest cent.)
$128.57 per EUP
T or F
A process costing system is most suitable for businesses that manufacture batches of unique products or provide specialized services.
False
T or F
In a process costing system, each process or department has its own Work-in-Process Inventory account.
True
T or F
A textile manufacturing company is most likely to use job order costing to arrive at the cost per yard of textile manufactured and sold to customers.
False
T or F
Process costing is the most appropriate costing method for a restaurant serving specialty cuisine.
False
T or F
At the end of an accounting period, the costs assigned to a production department can be split into the cost of units fully completed and transferred out, and the cost of units partially completed and remaining in the Work-in-Process Inventory of that department.
True
