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WorksheetsChapter 10 - Process Costing
Total questions: 29
Worksheet time: 15mins
Process Costing is used when identical units are produced through an ongoing series of uniform steps.
True
False
A utility such as the water company would typically use a process costing system.
True
False
If processing departments are arranged in a parallel manner, all units will go through all departments.
True
False
Costing is more difficult in a process costing system that it is in a job-order costing system.
True
False
In a process costing system, the cost of production report takes the place of the job cost sheet.
True
False
Process and Job-Order Costing are similar in that costs are accumulated (and unit costs are computed) for each separate customer order.
True
False
In a process costing system, a Work in Process account is maintained for each department.
True
False
It is important to identify labor costs with each customer order in a process costing system.
True
False
Operation costing employs aspects of both job-order and process costing systems.
True
False
Since costs are accumulated by department, there is no need for a Finished Goods Inventory Account in a process costing system.
True
False
In a process costing system, costs incurred in one department remain there rather than being transferred on the next department.
True
False
On a production report, labor and overhead costs are often added together and called conversion costs.
True
False
If materials are added 100% at the beginning of the process, then the work in process, end will get 100%.
True
False
The purpose of the quantity schedule is to show the costs charged to the department.
True
False
If all units do go through all processing departments, then the departments are probably arranged in a sequential pattern.
True
False
In a process costing system that assumes that normal spoilage occurs at the end of a process, the costs attributable to normal spoilage should be assigned to:
A. Ending work in process inventory.
B. Cost of Goods Manufactured and Ending Work in Process Inventory.
C. Cost of Goods Completed.
D. A specific loss account highlighting the inefficiencies.
An equivalent unit of material or conversion cost is defined as:
A. The amount of material or conversion cost necessary to complete one unit of production.
B. A unit of work in process inventory.
C. The amount of material or conversion cost necessary to start a unit or production.
D. 50% of the material or conversion cost of a unit of finished goods inventory assuming a linear production pattern.
In a process costing system, how is the unit cost affected in a cost of production report when materials are added in a department subsequent to the first department and the added materials result in additional units?
A. It causes an increase in the preceding department's unit cost.
B. It causes a decrease in the preceding department's unit cost that requires an adjustment of the transferred-in cost.
C. It causes an increase in the preceding department's unit cost but does not require an adjustment of the transferred-in cost.
D. It causes a decrease in the preceding department's unit cost but does not require an adjustment of the transferred-in unit cost.
Which of the following does not occur with process costing?
A. Allocation of on a periodic basis.
B. Allocation of cost upon completion of job.
C. Allocation of cost with regards to stage of completion.
D. Calculation of equivalent units.
Which of the following is true of abnormal spoilage?
A. It is considered to be part of production.
B. It is normally treated as a period cost.
C. It is normally treated as a product cost.
D. It is prorated between cost of goods sold and inventory.
Prior department costs are most similar to:
A. Conversion costs are added continuously throughout the process.
B. Costs in Beginning Inventory.
C. Materials added at the beginning of the period.
D. Transferred-out cost.
Normal spoilage costs are most often classified as:
A. A product cost.
B. A period cost.
C. Deferred charge.
D. Extraordinary item.
Which of the following products would most likely be accounted for with a process costing system?
A. A public accounting firm.
B. A retailer.
C. Airplane manufacture
D. Gasoline refinery.
Process costing should be used in assigning cost to products in which of the following situations?
A. If the product is composed of mass-produced homogeneous units.
B. If the product is manufactured individually based on an order received.
C. When the product is composed of heterogeneous units made in a job shop.
D. Whenever cost allocation is not used.
An error was made by RAGC Company in computing the percentage-of-completion of the current year's ending work in process inventory. The error resulted in the assignment of a lower percentage of completion to each component of the inventory than actually was the case. There was no beginning work in process inventory. What is the effect of the following?
1. The computation of equivalent units in total.
2. The computation of costs per equivalent unit.
3. Cost assigned to cost of goods completed for the period.
A.
1) Understated
2) Understated
3) Overstated
B.
1) Understated
2) Overstated
3) Overstated
C.
1) Overstated
2) Understated
3) Understated
D.
1) Overstated
2) Overstated
3) Understated
Which of the following production operations would most likely to employ a process cost system?
A. Shipbuilder
B. Aircraft Manufacturer
C. Bottler of Mineral Water
D. Homebuilder
The total amount in the Costs To Account For Schedule must equal the total amount on the:
A. Quantities Schedule
B. Equivalent Production Schedule
C. Cost To Account For Schedule
D. Cost Accounted For Schedule
The system flow in which the initial raw materials are placed into process in the first department and flow through every department in the factory is called a
A. Sequential Product Flow
B. Parallel Product Flow
C. Selective Product Flow
D. Uniform Product Flow
The analysis of the activity in a department or cost center for a period is called a
A. Quantity Report
B. Cost of Production Report
C. Cost of Goods Manufactured Report
D. Equivalent Production Report
