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Chapter 4 Examination
February 22, 2000
Choose the best answer.
1. Which of the following manufacturers would most likely not use a process-cost accounting system?
A) A producer of computer monitors.
B) A producer of lawn fertilizer.
C) A producer of frozen orange juice.
D) A custom-home builder.
E) A lumber mill.
2. Which of the following statements regarding similarities between process costing and job-order costing are true?
I) Both systems assign production costs to units of output.
II) Both systems require extensive knowledge of financial accounting.
III) The flow of costs through the manufacturing accounts is essentially the same.
A) I only.
B) I and III only.
C) II and III only.
D) III only.
E) I, II, and III.
3. Unit costs in a process-costing system are derived by using:
A) in-process units.
B) completed units.
C) physical units.
D) equivalent units.
E) a measure of activity other than those listed above.
4. Rex Co., had 4,000 units of work in process on April 1, 199x. During April, 11,000 units were completed and as of April 30, 5,000 units remained in production. How many units were started during April?
5. Kentucky Corporation uses a process-cost accounting system. The company adds direct materials at the start of its production process; conversion cost, on the other hand, is incurred evenly throughout manufacturing. The firm has no beginning work-in-process inventory; its ending work in process is 40% complete. Which of the following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory?
A) Materials, 100%; conversion cost, 100%.
B) Materials, 100%; conversion cost, 60%.
C) Materials, 100%; conversion cost, 40%.
D) Materials, 40%; conversion cost, 40%.
E) Materials, 40%; conversion cost, 100%.
6. Flagship Corporation adds all materials at the beginning of production and incurs conversion cost evenly throughout manufacturing. The company completed 40,000 units during the year and had 12,000 units in process at December 31, 30% complete with respect to conversion cost. Equivalent units for the year total:
A) materials, 40,000; conversion, 40,000.
B) materials, 52,000; conversion, 52,000.
C) materials, 52,000; conversion, 43,600.
D) materials, 43,600; conversion, 43,600.
E) materials, 40,000; conversion, 3,600.
7. Process costing is a method that is used to account for:
A) large numbers of identical products that are produced in a continuous manufacturing environment.
B) small numbers of products that are produced in batches.
C) raw materials that are converted to finished goods.
D) finished goods that are refined and processed further.
E) large numbers of products that are produced in a nonrepetitive process.
8. Which of the following is a key document in a typical process-costing system?
A) Departmental production report.
B) Master schedule.
C) Production budget.
D) Sequential product report.
E) Materials requirement report.
9. An important difference between job-order and process costing is:
A) in process costing, costs are accumulated by job order and in job-order costing, costs are accumulated by department.
B) in process costing, direct material costs incur continuously throughout the process and in job-order costing these costs are placed into production at one or more discrete points in the process.
C) in process costing, direct material is placed into production at one or more discrete points in the process and in job-order costing these costs incur continuously throughout the process.
D) in job-order costing, costs are accumulated by job order and in process costing, costs are accumulated by department.
E) none of the above, as there are no distinct differences between job-order and process costing.
10. Clayton Corporation, which adds materials at the beginning of production, uses a weighted-average process-costing system. Consider the data that follow.
|Number of Units||Cost of Material|
|Started in May||
The company's cost per equivalent unit for materials is:
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