Question 1

In a process costing system,all product costs for the period are accumulated and divided evenly over all

Accepted Answer

In a process costing system, all product costs for the period are accumulated and divided evenly over all units produced during that period. This is because the products are produced in large quantities and it is difficult to trace the costs to individual units. Therefore, an average cost per unit is computed and used to assign costs to each unit produced.

Question 2

In process costing,direct materials may be added at different points of a department's production process.

Accepted Answer

Direct materials may be added at different points of a department's production process in process costing. This is because process costing tracks the costs incurred during each stage of the production process, and direct materials are typically added at different stages depending on the nature of the product being produced.

Question 3

When work is in process at the end of an accounting period,cost accumulation and reporting is extremely easy under process costing,as the product costs are simply added up and divided evenly among the products produced.

Accepted Answer

While it is true that cost accumulation and reporting can be easier under process costing, the statement is not entirely accurate. When work is in process at the end of an accounting period, the costs of that work are not divided evenly among products produced. Instead, the costs are allocated based on the percentage of completion of each unit in process. Thus, the statement is false.

Question 4

The accounting firm PriceWaterhouseCoopers is an example of a company that would use a process costing system.

Accepted Answer

PriceWaterhouseCoopers, being a service firm, would typically use a job costing system rather than a process costing system, which is more suited for manufacturing environments with homogeneous products.

Question 5

Companies that mass produce similar products or employ a continuous production process typically use a job order system.

Accepted Answer

Companies that mass produce similar products or employ a continuous production process typically use a process costing system, not a job order system. Job order systems are generally used for customized or unique products that require individualized production processes.

Question 6

Companies that mass produce similar products or employ a continuous production process typically use a process costing system.

Accepted Answer

Process costing is used in industries which produce similar products, such as cement or chemicals, or which use a continuous production process, where output is constant and the input/output relationship is predictable. The main objective of process costing is to determine the cost of each unit of output, which is then used for pricing decisions, inventory valuation, and profitability analysis.

Question 7

The journal entries used to record cost flows in a process costing system differ from those used to record cost flows in a job order costing system.

Accepted Answer

The answer of The journal entries used to record cost...

Question 8

Costs incurred in a process costing system include direct material,direct labor and overhead.

Accepted Answer

In a process costing system, costs are typically classified into three categories: direct material, direct labor, and overhead. Therefore, the statement is true.

Question 9

The inventories used in a process costing system include work-in-process and finished goods,but not raw materials.

Accepted Answer

The inventories used in a process costing system include work-in-process, finished goods, and raw materials. Raw materials inventory represents the cost of materials that have been purchased but have not yet been used in the production process.

Question 10

The costs incurred in a process costing system,direct material,direct labor and manufacturing overhead,are the same as the costs incurred in a job order costing system.

Accepted Answer

In both process costing and job order costing, the costs incurred include direct material, direct labor, and manufacturing overhead. Therefore, the statement is true.

Question 11

Both process costing systems and job order costing systems accumulate costs on a job cost sheet.

Accepted Answer

Process costing systems accumulate costs by process or department, while job order costing systems accumulate costs on a job cost sheet for each individual job.

Question 12

When there is no work in process inventory at the end of a period,cost accumulation and reporting is extremely easy under process costing,as the product costs are simply added up and divided evenly among the products produced.

Accepted Answer

This statement is true. When there is no work in process inventory at the end of a period in process costing, the product costs are simply added up and divided evenly among the products produced, making cost accumulation and reporting easy.

Question 13

The soft drink bottler Dr.Pepper is an example of a company that would use a process costing system.

Accepted Answer

This is true. Process costing is used by companies that produce large quantities of identical products, such as soft drinks, where the production process is continuous and involves multiple stages. Process costing assigns costs to each stage of production and then allocates those costs to the final product.

Question 14

The inventories used in a process costing system are the same as those used in a job order costing system.

Accepted Answer

Both process costing and job order costing systems use the same types of inventories, such as raw materials inventory, work-in-process inventory, and finished goods inventory. However, the way each system tracks and values these inventories differs. In a process costing system, the inventories are tracked and valued based on the average cost of all units produced during a given period, whereas in a job order costing system, each individual job is tracked and valued separately.

Question 15

The journal entries used to record cost flows in a process costing system are the same as those used to record cost flows in a job order costing system.

Accepted Answer

In both process costing and job order costing, the cost flows are recorded in journal entries involving the use of materials, direct labor, and manufacturing overhead. The difference lies in how the costs are accumulated and assigned to products. In process costing, costs are accumulated by department or process and assigned to units based on their average cost, while in job order costing, costs are accumulated by job or order and assigned to products based on their actual cost.

Question 16

Like process costing,job order costing makes no attempt to track an individual product's costs,all the products have similar costs.

Accepted Answer

Unlike process costing, job order costing is used to track the costs of individual products or job orders. Each product or job order has unique costs associated with it, so job order costing does not assume that all products have similar costs.

Question 17

In process costing,all materials are added at the beginning of the production process,then labor and overhead is added during the production process.

Accepted Answer

The answer of In process costing,all materials are added at...

Question 18

In a job order costing system,the costs of each job are accumulated on a job cost sheet,while in process costing,the costs are accumulated by department.

Accepted Answer

In job order costing, costs are tracked for each specific job or order, while in process costing, costs are accumulated by department for continuous production processes.

Question 19

In a job order costing system,all product costs for the period are accumulated and divided evenly over all

Accepted Answer

In a job order costing system, product costs are accumulated and assigned to specific jobs or batches of products. Costs are not divided evenly over all products for the period.

Question 20

Both the process costing and job order costing systems accumulate product costs throughout the production process and assign those costs to individual

Accepted Answer

Both the process costing and job order costing systems are used to accumulate and assign product costs. In process costing, costs are accumulated by department or process, while in job order costing, costs are accumulated by job or specific order. Regardless of the system used, both accumulate and assign costs to individual products.

Quiz 14: Topic Focus: Process Costing