Chapter 16 - Process Costing and Analysis - Concepts

Which of the following products is most likely to be produced in a process operation?

• Airplanes

• 
  Cereal

• Bridges

• Custom cabinets

A key idea in process costing that refers to the number of whole units that could have been started and completed given the costs incurred in a period is known as:

• Equivalent units of production.

• Production cost report.

• A job cost sheet.

• Manufacturing overhead.

Which of the following is the best explanation for why it is necessary to calculate equivalent units of production in a process costing environment?

• In most process costing systems, conversion costs are added at the beginning of the process while direct materials are added evenly throughout the manufacturing process.

• In most cases, there is no difference between physical units and equivalent units of production.

• All of the work to make a unit 100% complete and ready to move to the next stage of production or to finished goods inventory may not have been completed in a single time period.

• Companies often use a combination of a process costing and job order costing systems.

Which of the following is not one of the four steps in accounting for production activity and assigning costs during a period under a process cost system?

• Assign and reconcile costs.

• Compute the cost per equivalent unit of production.

• Compute the equivalent units of production.

• Determine over or underapplied overhead.

Which of the following products is least likely to be produced in a process operation?

• Slacks for casual wear

• Custom cabinets

• Smartphones

• Calculators

Which of the following characteristics does not usually apply to process operations?

• Costs are computed using equivalent units.

• Partially completed products are transferred between processes.

• Each unit of product is separately identifiable.

• A separate Work in Process Inventory is used for each process.