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- 1. Multiple Choice
Process costing is a method of costing used in what type of industries?ManufacturingConstructionTransportationHospitality - 2. Multiple Choice
Process costing systems are used to apply costs to a specific job, such as the manufacturing of a specialized machine.
TRUE
FALSE
- 3. Multiple Choice
Equivalent units of production must be calculated before the unit production costs can be computed.
TRUE
FALSE
- 4. Multiple Choice
The first step performed in preparing a production cost report is computing the equivalent units of production.
TRUE
FALSE
- 5. Multiple Choice
The physical units in a department are another name for the equivalent units of production.
TRUE
FALSE
- 6. Multiple Choice
A process costing system is most appropriate when..
a variety of different products are produced, each one requiring different types of materials, labor, and overhead.
the focus of attention is on a particular job or order.
similar products are mass-produced.
individual products are custom made to the specification of customers.
- 7. Multiple Choice
A characteristic of products that are mass-produced in a continuous fashion is that..
the products are identical or very similar in nature.
they are grouped in batches.
they are produced at the time an order is received.
their costs are accumulated on job cost sheets.
- 8. Multiple Choice
Which of these statements best reflects a major distinguishing factor between a job-order costing system and a process costing system?
The manufacturing cost elements included.
The time period each covers.
The detail at which costs are calculated.
The number of work in process inventory accounts.
- 9. Multiple Choice
Which of the following is a true statement about process costing systems?
In process costing systems, costs are accumulated but not assigned.
A process costing system has one work in process inventory account for each process.
In process costing systems, costs are summarized on job cost sheets.
Unit costs are not computed in process costing systems.
- 10. Multiple Choice
In a process costing system, product costs are summarized:...
on job cost sheets.
on production cost reports.
after each unit is produced.
when the products are sold.
- 11. Multiple Choice
When manufacturing overhead costs are assigned to production in a process costing system, they are debited to
the Finished Goods Inventory account.
Cost of Goods Sold.
a Manufacturing Overhead account.
a Work in Process Inventory account.
- 12. Multiple Choice
20,000 units in a process that are 70% complete are referred to as:
20,000 equivalent units of production.
6,000 equivalent units of production.
14,000 equivalent units of production.
6,000 equivalent units of production.
- 13. Multiple Choice
Which of the following would not appear as a debit in the Work in Process Inventory account of a second department in a two stage production process?
Direct materials used.
Overhead applied.
Labour assigned.
Cost of products transferred out.
- 14. Multiple Choice
A process cost system would be used for all of the following products except...
chemicals
computer chips
soft drinks
motion pictures
- 15. Multiple Choice
In order to compute the physical unit flow, a company must first compute unit production costs.
TRUE
FALSE
- 16. Multiple Choice
Which of the following items is NOT characteristic of a process costing system?
Once production begins, it continues until the finished product emerges
The products produced are heterogeneous in nature
The focus is on continually producing homogeneous products
When the finished product emerges, all units have precisely the same amount of materials, labour and overhead
- 17. Multiple Choice
In a process cost system, the flow of cost is:
work in process, cost of goods sold, finished goods
finished goods, work in process, cost of goods sold
finished goods, cost of goods sold, work in process
work in process, finished goods, cost of goods sold
- 18. Multiple Choice
Conversion costs are the sum of:
Fixed and variable overhead costs
labour costs and overhead costs
Direct material costs and overhead costs
Direct labour and indirect labour costs
- 19. Multiple Choice
Indicate which of the following statement is NOT correct?
both a job order and process cost system track the same three manufacturing cost elements - Direct material, Direct labour and manufacturing overhead
A job order cost system uses only one work in process account, whereas a process cost system uses multiple work in process account
Manufacturing costs are accumulated the same way in a job order and in a process cost system
Manufacturing costs are assigned the same way in a job order and in a process cost system
- 20. Multiple Choice
Lan Largo Sdn Bhd has unit costs of RM10 for materials and RM30 for conversion costs. If there are 2,500 units in ending work in process, 40% complete as to conversion costs and fully complete as to materials cost, the total cost assignable to the ending work in process inventory is:
RM45,000
RM55,000
RM75,000
RM100,000
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