Week 7 (Process Costing)

Question 1

what are the 2 traditional types of cost accounting systems ?

Answer 1

1. job order costing
2. process costing

Question 1

represents the system used by a company to accumulate product cost information
what is this ?

Answer 1

cost accounting system

Question 2

• is used when a single product is produced on a continuing basis or long period of time
• systems accumulate product costs by department
  what is this ?

Answer 2

process costing

Question 3

• is used when many different jobs are worked on each period
• systems accumulated product costs by individual jobs
  what is this ?

Answer 3

job order costing

Question 4

what are the 2 methods of process costing ?

Answer 4

1. weighted average
2. FIFO (first-in, first out)

Question 5

• assumes all units have the same cost regardless of when the units were started
• makes no distinction between work done in prior or current periods
• blends together units and costs from prior and current periods
• thus, the cost of goods completed & transferred out is based on this one, average unit cost
  what is this ?

Answer 5

the weighted average method

Question 6

• assumes the oldest units are the units that are completed
• does make a distinction between work done in prior and current periods
• must keep separate units and costs from prior and current periods
• thus, the cost of goods completed & transferred out is based on the cost of the oldest units is this ?

Answer 6

the FIFO method

Question 7

complicate the determination of the unit cost for a department
what is this ?

Answer 7

partially completed units

Question 8

represent the number of wholly completed units a department could have finished given their available resources
what is this ?

Answer 8

equivalent units

Question 9

• two had completed products are equivalent to one completed product
• so, 10,000 units 70% complete are equivalent to ____ complete units ?

Answer 9

7000