Chapter 6

Question 1

The number of the same or similar complete units that could have been produced given the amount of work actually performed on both complete and partially complete units.

Answer 1

Equivalent Units

Question 2

A report that summarizes the physical units and equivalent units of a department, the costs incurred during the period, and the costs assigned to units completed and to units in ending Work-in-Process Inventories.

Answer 2

Production Cost Report

Question 3

True or False

The FIFO method includes both costs incurred during the current period and costs incurred during the prior period that are shown as the beginning Work-in-Process Inventory of the current period.

Answer 3

False

Question 4

Name the two categories of unit totals that must be equal in Step #1 of process costing.

Answer 4

Input Units

Output Units

Question 5

Name the two categories of units that are totaled to determine the input units.

Answer 5

Units in beginning Work-in-Process

Units Started

Question 6

Name the two categories of units that are totaled to determine the output units.

Answer 6

Units Completed and Transferred Out

Units in Ending Work-in-Process

Question 7

True or False

Step #1 of process costing is identical for the Weighted-Average and FIFO methods.

Answer 7

True

Question 8

True or False

Step #2 of process costing is identical for the Weighted-Average and FIFO methods.

Answer 8

False

Question 9

Name Step #1 of process costing.

Answer 9

Analyze physical flow of units

Question 10

Name Step #2 of process costing.

Answer 10

Calculate equivalent units for each cost element.

Question 11

Name Step #3 of process costing.

Answer 11

Determine total costs for each cost element.

Question 12

Name Step #4 of process costing.

Answer 12

Compute cost per equivalent unit for each cost element.

Question 13

Name Step #5 of process costing.

Answer 13

Assign total costs to completed units and partial units.

Question 14

Name the categories of units that are totaled to determine the total equivalent units for the Weighted-Average method.

Answer 14

Units Completed and Transferred Out

Units in Ending Work-in-Process

Question 15

Name the categories of units that are totaled to determine the total equivalent units for the FIFO method.

Answer 15

Equivalent Units to Complete Beginning Work-in-Process
Units Started and Completed
Equivalent Units in Ending Work-in-Process

Question 16

True or False

Step #3 of process costing is different for the Weighted-Average and FIFO methods.

Answer 16

False

Question 17

Name the two categories of costs that are totaled to determine the total manufacturing costs.

Answer 17

Cost in Beginning Work-in-Process

Costs Added During the Period

Question 18

True or False

Step #4 of process costing is different for the Weighted-Average and FIFO methods.

Answer 18

True

Question 19

State the computation to determine the cost per equivalent unit for the Weighted-Average method.

Answer 19

Total manufacturing cost for the cost element divided by the total equivalent units for the cost element.

Question 20

State the computation to determine the cost per equivalent unit for the FIFO method.

Answer 20

Costs added during the period for the cost element divided by the total equivalent units for the cost element.

Question 21

The key difference between the Weighted-Average and FIFO methods is the handling of the partially completed units in the _____ account.

Answer 21

Beginning Work-in-Process Inventory

Question 22

The calculations in the _____ method are simpler.

Answer 22

Weighted-Average

Question 23

The _____ method is most appropriate when Work-in-Process Inventory is relatively small, or direct materials prices and conversion costs are stable.

Answer 23

Weighted-Average

Question 24

The _____ method is most appropriate when direct materials prices, conversion costs, or inventory levels fluctuate significantly.

Answer 24

FIFO

Question 25

A costing method that charges current production costs (using standard unit costs) directly to finished goods inventory or directly to Cost of Goods Sold.

Answer 25

Backflush Costing

Question 26

Name the 2 approaches used to account for normal spoilage in process costing.

Answer 26

1. Prepare a separate equivalent unit computation for the number of spoiled units and allocate the costs separately.
2. Include the spoilage cost in total manufacturing costs by omitting the spoiled units from the equivalent unit computation.