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WorksheetsChapter 11 - Average and FIFO Costing
Total questions: 15
Worksheet time: 30mins
Which of the following characteristics applies in process costing but not to job order costing?
Identifiable batches of production
Equivalent units of production
Averaging process
Use of standard cost
An equivalent unit of material or conversion cost is equal to
The amount of material or conversion cost necessary to complete one unit of production
A unit of work in process inventory
The amount of material or conversion cost necessary to start a unit of production into work in process
Fifty percent of the material or conversion cost of a unit of finished goods inventory
Assuming that there was no beginning in process inventory and the ending work in process inventory Is 100% complete as to material costs, the number of equivalent units as to materials costs would be
The same as the units placed in process
The same as the units completed
Less than the units placed in process
Less than the units completed
What are the transferred-in costs as used in a process costing system?
Labor that is transferred from another department within the same plant instead of hiring temporary workers from the outside
Cost of the production of a previous internal process that is subsequently used in a succeeding internal process
Supervisory salaries that are transferred from an overhead cost center to a production cost center
Ending work in process inventory of a previous process that will be used in a succeeding process
Spoilage from a manufacturing process was discovered during an inspection of work in process. In a process costing system, the cost of the spoilage would be added to the cost of the good units produced if the spoilage is
Abnormal - No
Normal - Yes
Abnormal - No
Normal - No
Abnormal - Yes
Normal - Yes
Abnormal - Yes
Normal - No
In the computation of manufacturing cost per equivalent unit, the weighted average method of process costing considers
Current costs only
Current costs plus cost of ending work in process inventory
Current costs plus cost of beginning work in process inventory
Current costs less cost of beginning work in process inventory
When using the first-in-first-out method of process costing, the total equivalent units of production for a given period of time is equal to the number of units
In work in process at the beginning of the period times the percent of work necessary to complete the items, plus the number of units started during the period, less the number of units remaining in work in process at the end of the period times + the percent of work necessary to complete the items
In work in process at the beginning of the period, plus the number of units started during the period, plus the number of units remaining in work in process at the end of the period times the percent of work necessary to complete the items
Started into process during the period, plus the number of units in process at the beginning of the period
Transferred out during the period, plus the number of units remaining in work in process at the end pf the period times the percent of work necessary to complete the items
The units transferred is from the first department to the second department should be included in the computation of the equivalent units for the second department for which of the following methods of process costing
FIFO - Yes
AVERAGE - Yes
FIFO - Yes
AVERAGE - No
FIFO - No
AVERAGE - Yes
FIFO - No
AVERAGE - No
In developing a predetermined overhead rate for use in a process costing system, which of the following could be used as the base in computing the rate?
Actual factory overhead
Estimated factory overhead
Actual direct labor hours
Estimated direct labor hours
Any of the above could be used as a base
Which of the following statements are true?
I. The weighted-average method of process costing is computationally simpler than the FIFO method of process costing
II. Manufacturing companies that use process costing would usually have more products than manufacturing companies that use job costing
III. The production report prepared by companies using process costing will indicate the cost and quantity of materials purchased during the period
I only
II only
I and III only
II and III only
I, II, and III
Which of the following statements are FALSE?
I. A firm uses the weighted average method of process costing and all materials are added at the beginning of the production process. When computing equivalent units of production for materials, total equivalent units will equal total physical units.
II. Unit costs under the weighted-average method will always be greater than unit costs under the FIFO method.
III. The only difference between weighted average and FIFO methods of process costing is in the treatment of beginning work in process.
None are false
I only
II only
II and III only
I, II, and IIIx
Which of the following are needed to calculate the cost assigned to ending work in process under the FIFO method of process costing?
Unit Cost - No
Equivalent Units - No
Cost-IP beg. - Yes
Unit Cost - Yes
Equivalent Units - No
Cost-IP beg. - No
Unit Cost - Yes
Equivalent Units - Yes
Cost-IP beg. - No
Unit Cost - Yes
Equivalent Units - Yes
Cost-IP beg. - Yes
Which of the following statements are false?
I. The final step in a process costing production report is the calculation of the unit costs.
II. For cost control, the FIFO method of process costing is better than the weighted-average method.
III. The weighted-average method of process costing will always assign non cost to units completed & transferred than the FIFO METHOD.
I only
II only
I and III
I, II, and III
Beginning WIP is 45% complete, and ending WIP is 10% complete as to conversion costs. Materials are added at the beginning of the process. If a company uses weighted average, the total equivalent units for materials will equal:
EU to complete beginning inventory
Units started into the process this period
Units started into the process this period plus units in beginning inventory
Units transferred out
In comparing the FIFO and weighted average methods for calculating equivalent units
The FIFO method tends to smooth out costs more over time than weighted average method.
The weighted average method is more precise than the FIFO method because the weighted average method id based only on the work completed in the current period.
The two methods will give similar results even if physical inventory levels and production costs (materials and conversion costs) fluctuate growth with period to period.
The FIFO method is better than the weighted average method for judging the performance in a period independently from performance to preceding periods.
