R2 Process

When materials are purchased in a process costing system, a work in process account is debited with the cost of the materials.

• TRUE

• FALSE

Any difference in the equivalent units calculated under the weighted-average and the FIFO methods is due to the units in the ending work in process inventory.

• TRUE

• FALSE

The equivalent units in beginning work in process inventory plus the equivalent units for the work done during the period equals the units transferred out plus the equivalent units in ending work in process inventory.

• TRUE

• FALSE

There is no difference in the unit costs computed under the weighted-average and FIFO methods of process costing if there are no beginning work in process inventories.

• TRUE

• FALSE

Under the weighted-average method of process costing, costs from the prior period are averaged with those of the current period in computing unit costs.

• TRUE

• FALSE

In a process costing production report, the “Cost to be accounted for” will be the same whether the weighted-average or the FIFO method is used.

• TRUE

• FALSE

Under the FIFO method of product costing, equivalent units of production consider units in the beginning inventory as if they were started and completed during the current period.

• TRUE

• FALSE

The production report of a company using the FIFO cost method likely would show goods transferred from a department in two parts--one part consisting of units from the beginning inventory completed and transferred, and the other part consisting of units that were both started and completed during the month.

• TRUE

• FALSE

In computing the cost per equivalent unit on the production report, costs in the beginning work in process inventory are kept separate from current period costs when the FIFO method is used.

• TRUE

• FALSE

A major advantage of the FIFO method is that it allows managers to judge the performance of the current period independently of the performance of the prior period.

• TRUE

• FALSE