Process Costing Quiz

Which of the following is typically used for mass production of small, identical, low-cost items?

• Job Costing

• Process Costing

• Activity-Based Costing

• Variable Costing

Which industry is NOT a typical application of process costing?

• Petrochemical refinery

• Paint manufacturer

• Paper mill

• Custom furniture

In process costing, what is the Work in Process account comprised of?

• Specific purpose

• Individual job

• Finishes goods

• Direct labor only

What is the main objective of both job costing and process costing?

• To allocate direct labor costs

• To trace overhead costs

• To determine the cost of products

• To estimate future production

What method is used to assign overhead in both job costing and process costing?

• Actual rate times actual activity

• Predetermined rate times actual activity

• Predetermined rate times estimated activity

• Actual rate times estimated activity

In process costing, costs flow from one process to the next. If $200,000 in manufacturing costs were charged to the Cutting Department, how many units were processed if each unit cost $20?

• 5,000

• 10,000

• 15,000

• 20,000

Equivalent units of production is a concept used in process costing. What does it represent?

• Total number of units started during the period

• Total number of partially completed units

• A number of partially completed units expressed as fully completed units

• Total number of units completed during the period

If PencilCo started 15,000 units and completed 10,000 units, leaving 5,000 units 30% complete, how many equivalent units of production are there?

• 10,000

• 11,500

• 1,500

• 15,000

What formula is used to calculate the cost per equivalent unit?

• Product cost for the period over equivalents units

• Total unit over equivalent units

• Product costs for the period over total units

• Total units over product costs for the period

PencilCo incurred $27,600 in production costs and had 11,500 equivalent units. What is the cost per unit?

• $1.84

• $2.40

• $2.76

• $2.90