Question 1

The FIFO process costing method assumes that the items in ending work in process inventory were started and completed during the current period.

Accepted Answer

The FIFO process costing method assumes that the items in ending work in process inventory were started during the current period, but it does not assume that they were completed during the current period. Instead, it assumes that they will be completed in the next period.

Question 2

When the FIFO costing method is used in process costing,the number of units in beginning inventory is multiplied by 100 percent to determine the equivalent units.

Accepted Answer

In the FIFO costing method, only the work done during the current period is considered for calculating equivalent units, so the units in beginning inventory are not simply multiplied by 100 percent. The focus is on what was added to those beginning units during the current period to complete them.

Question 3

The number of equivalent units produced for direct materials cost using the FIFO costing procedure is the sum of the units in beginning work in process inventory,units started and completed during the period,and the productive effort applied to ending work in process inventory.

Accepted Answer

The answer of The number of equivalent units produced for...

Question 4

Conversion costs are defined as the combined total of direct materials costs and direct labor costs incurred by a production department.

Accepted Answer

Conversion costs are defined as the combined total of direct labor costs and manufacturing overhead costs incurred by a production department.

Question 5

In a process costing system,products flow in a LIFO manner,from department to department.

Accepted Answer

Products flow in a FIFO (First-In-First-Out) manner, from department to department in a process costing system.

Question 6

Regardless of the cost approach used,in a process costing system,costs attached to units in beginning inventory are included in the computation of costs per equivalent unit.

Accepted Answer

The answer of Regardless of the cost approach used,in a...

Question 7

In a process costing system,all production costs are assigned to departments.

Accepted Answer

In process costing, all production costs are allocated to the different departments involved in the production process. This allows for the determination of the cost of production for each department and the accumulation of those costs to determine the total cost of production.

Question 8

The product unit cost is the sum of the cost elements added in all production department processes.

Accepted Answer

The product unit cost is the total of all cost elements incurred during production, which includes the cost of all materials, labor, and overhead expenses associated with each production department.

Question 9

Separate equivalent units of production usually are calculated for materials and conversion costs.

Accepted Answer

Separate equivalent units of production are calculated for materials and conversion costs because these are two different cost categories in manufacturing. The materials used in production have to be accounted for separately from the conversion costs, which include direct labor and overhead costs. Calculating separate equivalent units for each cost category allows for a more accurate determination of the total cost of production.

Question 10

In process costing,all costs incurred by a department or production process are divided by the equivalent units produced during the period to determine the average cost per unit produced.

Accepted Answer

This statement is true.

Question 11

Because process costing is normally associated with a continuous production flow,products that are in process at the beginning of the period are assumed to be the first products completed during the current period.

Accepted Answer

This statement is true, as process costing involves tracking the costs of a continuous production flow, and typically assumes that products in process at the beginning of the period will be the first completed during the current period.

Question 12

When the FIFO cost flow assumption is used,the equivalent units will always equal the actual units in beginning work in process inventory,plus the actual units started and completed during the current period plus the percent of ending work in process inventory completed during the current period.

Accepted Answer

When the FIFO cost flow assumption is used, the equivalent units will not always equal the actual units in beginning work in process inventory, plus the actual units started and completed during the current period plus the percent of ending work in process inventory completed during the current period. This is because with FIFO, the costs and units from the beginning inventory are assumed to be completed first, while the costs and units in the current period are completed later, so the equivalent units calculation will depend on the percentage of completion of the ending inventory.

Question 13

Equivalent production is a measure of productive output of units for a period of time,expressed in terms of fully completed or equivalent whole units produced.

Accepted Answer

Equivalent production is indeed a measure of productive output of units for a period of time, expressed in terms of fully completed or equivalent whole units produced.

Question 14

In many instances,direct materials are added at the beginning of the process.

Accepted Answer

Direct materials are usually added at the beginning of the production process, as they are the basic materials from which the product is made.

Question 15

In a process costing system,each department's production costs are transferred to the next department and ultimately to the Finished Goods Inventory account.

Accepted Answer

In a process costing system, each department's production costs are transferred to the next department in the production process until the final finished product is complete. Once the final product is completed, the total production costs are transferred to the Finished Goods Inventory account.

Question 16

The number of equivalent units of production may be larger than the number of completed units during the period.

Accepted Answer

Equivalent units of production can be calculated for partially completed units as well, which can result in a larger number of equivalent units than completed units during the period.

Question 17

Under the FIFO cost flow assumption,separate unit cost analyses are not used for each accounting period because costs of different periods are averaged.

Accepted Answer

The answer of Under the FIFO cost flow assumption,separate unit...

Question 18

Equivalent units are defined as the number of units completed and transferred out of work in process inventory during the current period.

Accepted Answer

Equivalent units are defined as the number of fully completed units and the proportional equivalent units of partially completed units in work in process inventory.

Question 19

If 45,000 units of ending work in process inventory are 60 percent complete as to conversion costs,27,000 equivalent units of conversion costs must be incurred to complete these units during the next period.

Accepted Answer

The equivalent units for the ending work in process inventory would be 45,000 units * 60% = 27,000 equivalent units, which means these units have already incurred 27,000 equivalent units of conversion costs, not that 27,000 more are needed to complete them.

Question 20

The amount of equivalent production units for direct materials is always the same as that for conversion costs.

Accepted Answer

The amount of equivalent production units for direct materials and conversion costs can be different, as they are calculated based on different factors. The equivalent production units for direct materials is based on the number of units of input materials used, while the equivalent production units for conversion costs is based on the number of units of output produced. Therefore, they can lead to different amounts.

Quiz 18: Costing Systems- Process Costing