Managerial Ch 04 - Process Costing

Question 1

Conversion cost

Answer 1

Direct labor cost plus manufacturing overhead cost. (p. 148)

Question 2

Equivalent units

Answer 2

The product of the number of partially completed units and their percentage of completion with respect to a particular cost. Equivalent units are the number of complete whole units that could be obtained from the materials and effort contained in partially completed units. (p. 148)

Question 3

Equivalent units of production (weighted-average method)

Answer 3

The units transferred to the next department (or to finished goods) during the period plus the equivalent units in the department’s ending work in process inventory. (p. 148)

Question 4

FIFO method

Answer 4

A process costing method in which equivalent units and unit costs relate only to work done during the current period. (p. 148)

Question 5

Operation costing

Answer 5

A hybrid costing system used when products have some common characteristics and some individual characteristics. (p. 152)

Question 6

Process costing

Answer 6

A costing method used when essentially homogeneous products are produced on a continuous basis. (p. 142)

Question 7

Processing department

Answer 7

An organizational unit where work is performed on a product and where materials, labor, or overhead costs are added to the product. (p. 143)

Question 8

Weighted-average method

Answer 8

A process costing method that blends together units and costs from both the current and prior periods. (p. 148)