Chap 4: Process Costing Quiz

Process costing is typically used for businesses that make unique goods in relatively small amounts.

• True

• False

In process costing, the manufacturing costs assigned to the product must always follow the physical movement of the product.

• True

• False

The costs moved from one processing department to the next processing department are called 'transported-out' costs in the first department and 'transported-in' costs in the next department.

• True

• False

Both process costing and job costing assign costs to units as they proceed through the process.

• True

• False

To simplify the accounting, the journal entry to record the transfer of costs from one WIP account to the next WIP account is generally made once a month to reflect all physical transfers that occurred during the month.

• True

• False

Unique or custom-made goods use a process costing system.

• True

• False

The number of partially completed units multiplied by the percentage of process complete equals the number of equivalent units.

• True

• False

Equivalent units should be computed separately for direct materials and conversion costs.

• True

• False

Conversion costs are usually incurred evenly throughout productions.

• True

• False

In a mass-production environment, direct labor is usually a relatively small component of the total manufacturing costs.

• True

• False