Chapter 5 smart cards

Question 1

In process costing, manufacturing overhead costs are ______.

generally applied using a predetermined overhead rate

only assigned to the first work in the process department

not assigned to work in the process

applied based on actual costs incurred in each department

Answer 1

generally applied using a predetermined overhead rate

Question 2

Combines costs and outputs from the current and prior periods. –

Bases costs solely on the costs and outputs from the current period. –

Answer 2

Weighted-average method - Combines costs and outputs from the current and prior periods.

FIFO method -

Question 3

Which of the following equations is correct?

Units in ending WIP + units started or transferred in = Units in beginning WIP + units completed and transferred out

Units in beginning WIP + units started or transferred in = Units in ending WIP + units completed and transferred out

Units in beginning WIP + units started or transferred in = Units completed and transferred out - units in ending WIP

Answer 3

Units in beginning WIP + units started or transferred in = Units in ending WIP + units completed and transferred out

Question 4

Process costing accumulates costs by ________

Answer 4

department

Question 5

The equivalent units of production computed under the weighted-average method consider the percentage completed of the beginning inventory.

True or false?

Reason: The equivalent units already include work accomplished in prior periods.

Answer 5

False

Question 6

Costs per equivalent unit are used to value ______.

both units in ending inventory and units transferred to the next department

only units in ending inventory

only units transferred to the next department

only units that are transferred to cost of goods sold

Answer 6

both units in ending inventory and units transferred to the next department

Question 7

In process costing, manufacturing overhead costs are distributed to each department ______.

according to the amount of the allocation base incurred in the department

based on the value added to the product by the department

equally

based on number of processing departments used in production

Answer 7

according to the amount of the allocation base incurred in the department

Question 8

Methods to calculate departmental unit costs include ______.
LIFO
weighted-average
FIFO
specific identification

Answer 8

weighted-average
FIFO

Question 9

Differences between job-order and process costing include that process costing ______.

is used for indistinguishable products
assigns materials, labor and overhead costs to specific customer orders
accumulates costs by the department
computes unit costs by job

Answer 9

accumulates costs by the department
is used for indistinguishable products