chapter 4

Question 1

process-costing system

Answer 1

the unit cost of a product or service is obtained by assigning total costs to many identical or similar units. each unit is assumed to receive the same amount of direct material costs, direct manufacturing costs, and indirect manufacturing costs.

Question 2

conversion costs

Answer 2

all manufacturing costs other than direct material costs, including manufacturing labour, indirect materials, energy, plant depreciation, etc.

Question 3

equivalent units

Answer 3

a term used to identify a derived amount of output units that take the quantity of each input (factor of production) in units completed or in work in progress and convert it into the amount of completed output units that could be made with that quantity of input.

Question 4

weighted average method

Answer 4

determines the price per unit good by focusing on the total costs and the total quantity of rounded-off equivalent units. it appoints the average costs to the completed goods and the end stock WIP.

Question 5

FIFO method

Answer 5

appoints the costs of the initial stock WIP to the first completed goods and appoints the costs of the equivalent units that have been worked on during the period to the initial stock finished goods, then to new units, and finally to the units end stock WIP.

Question 6

standard costing

Answer 6

teams of design and process engineers, operations personnel, and management accountants determine separate standard, or equivalent-unit costs based on the different technical processing specifications for each product.

Question 7

hybrid-costing system

Answer 7

blends characteristics from both job-costing and process-costing systems.