Accounting 202 Home
Select the best answer.
1. 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.
2. 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.
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. 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%.
5. The equivalent units of conversion for April total:
6. The equivalent units of direct materials for April total:
7. An operation costing system is:
A) identical to a process costing system except that actual manufacturing overhead costs are traced to units of product.
B) a hybrid of job-order and process costing.
C) the same as job order system except that direct materials costs are accounted for in the same way as in process costing.
D) identical to a job order costing system except that under actual manufacturing overhead costs are traced to units of product.
E) A & C.
8. Which of the following product-costing systems would be appropriate for the conversion activities for cashmere and acrylic sweaters?
A) Direct material costing.
B) Operation costing.
C) Department production costing.
D) Cost driver.
E) None of the above.
9. The chief difference between process-costing and job-order costing systems is:
A) job-order costing systems accumulate production by job or batch, while process-costing systems accumulate production costs by department.
B) job-order costing is usually easier and cheaper to calculate.
C) law firms usually use process costing, while grain manufacturers use job-order costing.
D) B & C only.
E) All of the above
10. The main difference between the FIFO method and the weighted average method for evaluating equivalent conversion costs is that when calculating under the FIFO method the ending inventory is not used.
B) False; the costs incurred in the period are ignorored under the FIFO method.
C) False; the beginning inventory is ignored when calculating under the weighted average method.
D) False; the beginning inventory is ignored when calculating under the FIFO method.
E) False, but for none of the reasons listed above.