Deck 5: Process Costing

Question 1

The two basic types of product costing systems are

A)department and plant.
B)FIFO and weighted-average.
C)variable and process.
D)job and process.

Answer 1

D

Question 2

To simplify the accounting, the journal entry to record the transfer of costs from one WIP account to the next WIP account is generally made once a month to reflect all physical transfers that occurred during the month.

Answer 2

True

Question 3

When units are moved from one processing department to the next, the cost associated with those units must also be moved from one WIP account to the next. What are these costs called?

A)Transported costs
B)Transmitted costs
C)Transferred costs
D)Conveyed costs

Answer 3

C

Question 4

In a job cost system, all costs flow to a particular job.

Question 5

The costs moved from one processing department to the next processing department are called "transported-out" costs in the first department and "transported-in" costs in the next department.

Question 6

Which of the following product costing systems is normally used to assign costs to goods that are mass produced?

A)Fixed costing
B)Job costing
C)Process costing
D)LIFO costing

Question 7

In process costing, the manufacturing costs assigned to the product must always follow the physical movement of the product.

Question 8

Process costing is typically used for businesses that make unique goods in relatively small amounts.

Question 9

Conversion costs are the sum of direct labor and direct materials.

Question 10

In process costing, the costs flow from Raw Materials Inventory, to Work in Process Inventory, to Finished Goods Inventory.

Question 11

Each manufacturing process will have a WIP inventory account.

Question 12

Unique or custom-made goods use a process costing system.

Question 13

Both process costing and job costing assign costs to units as they proceed through the process.

Question 14

Baxter Company produces children's wiffle ball sets using a three-step sequential process that includes molding, coloring and finishing. When the sets are completely finished, out of which account should the cost be transferred?

A)Finished goods inventory
B)WIP inventory-coloring
C)WIP inventory-finishing
D)WIP inventory-molding

Question 15

How are manufacturing costs treated in process costing?

A)The manufacturing costs are added only when the goods are in finished inventory.
B)The manufacturing costs are added only when the goods are sold.
C)The manufacturing costs always follow the physical movement of the product.
D)None of the above.

Question 16

Cost for direct materials, direct labor and manufacturing overhead are assigned to each job.

Question 17

Indirect labor would not be a component of conversion costs.

Question 18

A separate work in process inventory account is maintained for each process.

Question 19

Baxter Company produces wiffle ball sets using a three-step sequential process that includes molding, coloring and finishing. At what stage would the sets be allocated manufacturing overhead?

A)When the frisbees are in WIP inventory-molding
B)When the frisbees are in WIP inventory-finishing
C)When the frisbees are in WIP inventory-coloring
D)All of the above

Question 20

Prime costs include direct labor and direct materials.

Question 21

Process costing is most likely used in which of the following industries?

A)Chemicals
B)Aircraft
C)Construction
D)Printing

Question 22

Process costing is most likely used in which of the following industries?

A)Pharmaceuticals
B)Health Care
C)Shipbuilding
D)Construction

Question 23

Equivalent units express the amount of work done during a period in terms of partially completed units.

Question 24

What does direct labor costs plus manufacturing overhead equal?

A)Prime costs
B)Operating costs
C)Conversion costs
D)Equivalent costs

Question 25

A company manufactures mirrors. Last month's costs were: What were the conversion costs for the month?

A)$302,000
B)$392,000
C)$234,000
D)$90,000

Question 26

If a company has 6,000 units that are 60% complete, the equivalent unit figure is 3,600.

Question 27

The costing system used by an oil refinery would be

A)process costing.
B)job costing.
C)equivalent units costing.
D)conversion cost costing.

Question 28

Conversion costs are usually incurred evenly throughout productions.

Question 29

A system for assigning costs for products made in a continuous process is

A)process costing.
B)job costing.
C)equivalent units costing.
D)conversion cost costing.

Question 30

Process costing would likely be used by which of the following?

A)Clear Channel Advertising
B)PIP Printing
C)DBA Management Consultants
D)PepsiCo

Question 31

The costing system used by a company making computer chips would be

A)process costing.
B)job costing.
C)equivalent units costing.
D)conversion cost costing.

Question 32

Conversion costs are generally added evenly throughout a process.

Question 33

The number of partially completed units multiplied by the percentage of process completed equals the number of equivalent units.

Question 34

The costing system used by a company producing custom fireplace mantels would be

A)process costing.
B)job costing.
C)equivalent units costing.
D)conversion cost costing.

Question 35

In process costing, manufacturing costs are usually combined into two categories: direct materials and conversion costs.

Question 36

A company manufactures wallets. Last month's costs were: What were the conversion costs for the month?

A)$235,000
B)$390,000
C)$237,000
D)$472,000

Question 37

In a process costing environment, direct materials and direct labor are usually combined into one cost category called "conversion costs."

Question 38

Equivalent units should be computed separately for direct materials and conversion costs.

Question 39

In a process costing environment, direct labor and manufacturing overhead are usually combined into one cost category called "conversion cost."

Question 40

Equivalent units express the amount of work done during a period of time in terms of fully completed units of output.

Question 41

If conversion costs are added evenly throughout the production process, and the units have made it 50% of the way through the production process, then the percentage completion for conversion costs is 50%.

Question 42

If all direct materials are added at the beginning of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is

A)100%.
B)0%.
C)50%.
D)none of the above.

Question 43

If all direct materials are added at the end of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is

A)50%.
B)100%.
C)0%.
D)none of the above.

Question 44

The weighted-average method of process costing is simpler than the FIFO method.

Question 45

Companies that use automated production processes often condense the three manufacturing costs into two categories: Direct materials and Conversion costs.

Question 46

If conversion costs are added evenly throughout the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is

A)0%.
B)100%.
C)50%.
D)cannot determine

Question 47

In a mass-production environment, direct labor is usually a relatively small component of the total manufacturing costs.

Question 48

Companies that use automated production processes often condense the three manufacturing costs into two categories: Direct labor and Conversion costs.

Question 49

Manufacturing costs are usually combined into two categories in a process costing system. These two categories are

A)direct labor and conversion costs.
B)direct materials and conversion costs.
C)manufacturing overhead and conversion costs.
D)direct materials and direct labor.

Question 50

If all direct materials are added at the beginning of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is 0%.

Question 51

If all direct materials are added at the beginning of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is 50%.

Question 52

If all direct materials are added at the end of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is 0%.

Question 53

If all direct materials are added at the beginning of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is 100%.

Question 54

If all direct materials are added at the end of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is 100%.

Question 55

The FIFO method requires that any units in beginning inventory be costed separately from any units started in the current period.

Question 56

Direct materials are often added at a particular point in the production process.

Question 57

The number of equivalent units is usually the same for direct materials and conversion costs.

Question 58

If all direct materials are added at the end of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is 50%.

Question 59

The weighted average and FIFO methods differ only in how they treat beginning inventory.

Question 60

In process costing, ________ is/are found by taking the number of partially completed physical units and multiplying it by the percentage of the process completed.

A)cost of goods sold
B)equivalent units
C)fixed manufacturing overhead costs
D)conversion costs

Question 61

Color Wheel has 3,500 gallons of paint in WIP inventory, with 75% of materials already added. What are equivalent units in ending WIP inventory for materials if the paint is 60% through the process?

A)2,100
B)2,625
C)0
D)525

Question 62

The following information is provided by Arrow Company: The units in ending WIP inventory were 80% complete for materials and 40% complete for conversion costs.
At the end of the year, what are the equivalent units for conversion costs?

A)5,200
B)1,200
C)4,000
D)2,800

Question 63

Perfect Pigments has 3,500 gallons of paint in WIP inventory, with 80% of materials already added. What are equivalent units in ending WIP inventory for materials if the paint is 50% through the process?

A)2,800
B)1,750
C)0
D)1,050

Question 64

The following information is provided by Zander Corporation: The units in ending WIP inventory were 80% complete for materials and 45% complete for conversion costs.
What are the total equivalent units for direct materials?

A)14,000
B)5,000
C)4,000
D)13,000

Question 65

The following information is provided by Alexandria Corporation: The units in ending WIP inventory were 75% complete for materials and 50% complete for conversion costs.
What are the total equivalent units for direct materials?

A)12,750
B)3,750
C)5,000
D)14,000

Question 66

The following information is provided by Alexandria Corporation: The units in ending WIP inventory were 75% complete for materials and 50% complete for conversion costs.
At the end of the year, what are the equivalent units for conversion costs?

A)7,000
B)9,000
C)2,500
D)11,500

Question 67

The full-time employees at Rocky Corporation work 8 hours per day, while the part-time employees work 6 hours per day. Rocky has 2,250 full-time employees and 900 part-time employees. What is the number of full-time equivalent employees?

A)2,363
B)2,925
C)3,150
D)2,250

Question 68

A business has 175 full-time workers who work 8 hours per day. They have 130 part-time workers who work 4 hours per day. What is the number of full-time equivalent employees?

A)150
B)300
C)238
D)240

Question 69

Yummy Tummy Desserts has 3,200 quarts of ice cream in WIP inventory, with all materials already added. What are equivalent units in ending WIP inventory for materials if the ice cream is 75% through the process?

A)3,200
B)2,400
C)800
D)0

Question 70

The following information is provided by Adametz Company: The units in ending WIP inventory were 90% complete for materials and 50% complete for conversion costs.
At the end of the year, what are the equivalent units for conversion costs?

A)3,750
B)3,300
C)5,400
D)2,100

Question 71

In a process system, direct labor and manufacturing overhead are normally

A)incurred at the end of the process.
B)incurred evenly throughout the process.
C)incurred in full at the beginning of the process.
D)not recorded.

Question 72

If conversion costs are added evenly throughout the production process, and the units have made it 50% of the way through the production process, then the percentage completion for conversion costs is

A)0%.
B)50%.
C)100%.
D)none of the above.

Question 73

Which of the following is a measure of the amount of work done, expressed in complete units of output?

A)Job costing
B)Process costing
C)Conversion costs
D)Equivalent units

Question 74

The following information is provided by Adametz Company: The units in ending WIP inventory were 90% complete for materials and 50% complete for conversion costs.
What are the total equivalent units for direct materials?

A)7,080
B)3,780
C)4,200
D)7,500

Question 75

The following information is provided by Zander Corporation: The units in ending WIP inventory were 80% complete for materials and 45% complete for conversion costs.
At the end of the year, what are the equivalent units for conversion costs?

A)11,250
B)6,300
C)2,250
D)9,000

Question 76

Color Wheel has 3,500 gallons of paint in WIP inventory, with 75% of materials already added. The paint is 60% through the process. Assuming all conversion costs are added evenly throughout the process, what are the equivalent units for conversion costs?

A)0
B)525
C)2,100
D)2,625

Question 77

Yummy Tummy Desserts has 3,200 quarts of ice cream in WIP inventory, with all materials already added. The ice cream is 75% through the process. Assuming all conversion costs are added evenly throughout the process, what are the equivalent units for conversion costs?

A)0
B)3,200
C)2,400
D)800

Question 78

A company uses a process system. The number of equivalent units in ending WIP inventory regarding direct materials costs and conversion costs is

A)always lower for direct materials.
B)always equal.
C)always lower for conversion costs.
D)none of the above.

Question 79

Perfect Pigments has 3,500 gallons of paint in WIP inventory, with 80% of materials already added. The paint is 50% through the process. Assuming all conversion costs are added evenly throughout the process, what are the equivalent units for conversion costs?

A)0
B)1,050
C)2,800
D)1,750

Question 80

The following information is provided by Arrow Company: The units in ending WIP inventory were 80% complete for materials and 40% complete for conversion costs.
What are the total equivalent units for direct materials?

A)2,400
B)6,400
C)3,000
D)7,000