chapter 4 assignment questions

Question 1

In process manufacturing, units are mass produced in a continuous fashion

true or false

Answer 1

true

Question 2

In a process cost system, labour and overhead can be added in any production department; however, materials are only added in the first department

true or false

Answer 2

false

Question 3

Beginning Work in Process is added to units completed and transferred out to determine equivalent units of production under the weighted-average method

true or false

Answer 3

false

Question 4

When material costs and conversion costs do not occur in the same process at the same time, the weighted-average method cannot be used effectively

true or false

Answer 4

false

Question 5

Conversion cost is another name for manufacturing overhead.

True
False

Answer 5

false

Question 6

Companies often use a combination of a process cost and a job-order cost system, called job process costing.

true or false

Answer 6

false

Question 7

A primary driver of overhead costs in continuous manufacturing operations is direct labour hours

true or false

Answer 7

false

Question 8

When goods are completed, the entry to record the transfer of the goods out of the last department includes a debit to Cost of Goods Sold

true or false

Answer 8

false

Question 9

When comparing the FIFO with the weighted-average method, the FIFO method provides current cost information

true or false

Answer 9

true

Question 10

Since the FIFO method of determining equivalent units of production provides current cost information, companies using this approach have more accurate pricing strategies

true or false

Answer 10

true

Question 11

What are physical units?

a) The actual units to be accounted for during a period.
b) The pro-rata portion of units completed during the period.
c) Units in process at the end of the period.
d) The total units completed and transferred out during the period

Answer 11

a) The actual units to be accounted for during a period.

Question 12

Which statement is true?

a) Total units accounted for = beginning Work in Process – units transferred out.
b) Beginning Work in Process + ending Work in Process = total units accounted for.
c) Total units accounted for = units in ending Work in Process + units transferred out.
d) Ending Work in Process – equivalent units = total units accounted for.

Answer 12

c) Total units accounted for = units in ending Work in Process + units transferred out.

Question 13

Coronado Company enters materials at beginning of the process. On January 1, there was no beginning Work in Process, but there were 300 units in ending Work in Process inventory. To what is the ‘number of units completed’ equal?

a) The same as the number of units started.
b) The number of units started less 300.
c) The number of units started plus 300.
d) The same as the number of equivalent units.

Answer 13

b) The number of units started less 300.

Question 14

What is a production cost report used for?

a) It is an external report provided to shareholders.
b) It shows costs charged to a department and costs accounted for.
c) It shows equivalent units of production but not physical units.
d) It shows the basis on which overhead is allocated.

Answer 14

b) It shows costs charged to a department and costs accounted for.

Question 15

Process cost systems are used to apply costs to similar products that are mass-produced in a continuous fashion

true or false

Answer 15

true

Question 16

A process cost system is used when each finished unit is indistinguishable from another

true or false

Answer 16

true

Question 17

Companies that produce soft drinks, motion pictures, and computer chips would all use process cost accounting

true or false

Answer 17

false

Question 18

In a process cost system, costs are tracked by individual jobs

true or false

Answer 18

false

Question 19

Job-order costing and process costing track different manufacturing cost elements

true or false

Answer 19

false

Question 20

Both job-order costing and process costing account for direct materials, direct labour, and manufacturing overhead.

true or false

Answer 20

true

Question 21

Costs flow through the accounts in the same basic way for both job-order costing and process costing

true or false

Answer 21

true

Question 22

In a process cost system, only one work in process account is used.

true or false

Answer 22

false

Question 23

In a process cost system, costs are summarized in a job cost sheet

true or false

Answer 23

false

Question 24

in a process cost system, the unit cost is total manufacturing costs for the period divided by the equivalent units produced during the period

true or false

Answer 24

true