Chapter 11 Average and FIFO Costing335MULTIPLE CHOICE -THEORIES1. Which of the following characteristics applies in process costing but not to joborder costing?a. [dentifiable batches of production.b. Equivalent units of productionc. Averaging processd. Use of standard cost2. An equivalent unit of material or conversion cost is equal toa. The amount of material or conversion cost necessary to complete one unit ofproduction.b. A unit of work in process inventory.C. The amount of material or conversion cost necessary to start a unit ofproduction into work in processd. Fifty percent of the material or conversion cost of a unit of finished goodsinventory3. Assuming that there was no beginning in process inventory and the ending workin process inventory is 100% complete as to material costs, the number ofequivalent units as to materials costs would bea. The same as the units placed in processb. The same as the units completedc. Less than the units placed in processd. Less than the units completed4. What are transferred-in costs as used in a process costing system?a. Labor that is transferred from another department within the same plantinstead of hiring temporary workers from the outside.b. Cost of the production of a previous internal process that is subsequently´used in a succeeding internal process.C. Supervisory salaries that are transferred from an overhead cost center to aproduction cost center.d. Ending work in process inventory of a previous process that will be used in asucceeding process Cost Accounting5. Spoilage from a manufacturing process was discovered during an inspection ofwork in process. In a process costing system, the cost of the spoilage would beadded to the cost of the good units produced if the spoilage isAbnormalNormala..NoYesb..NoNoC..YesYesd..YesNo6. In the computation of manufacturing cost per equivalent unit, the weighted-average method of process costing considersa. Current costs onlyb. Current costs plus cost of ending work-in-process inventoryc. Current costs plus cost of beginning work-in-process inventoryd. Current costs less cost of beginning work-in-process inventory7. When using the first-in-first-out method of process costing, the total equivalentunits of production for a given period of time is equal to the number of unitsa. In work in process at the beginning of the period times the percent of worknecessary to complete the items, plus the number of units started during theperiod, less the number of units remaining in work in process at the end ofthe period times + the percent of work necessary to complete the items.b. 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 inprocess at the end of the period times the percent of work necessary tocomplete the itemsC. Started into process during the period, plus the number of units in process atthe beginning of the period.d. Transferred out during the period, plus the number of units remaining inwork in process at the end of the period times the percent of work necessaryto complete the'item.

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1. Which of the following characteristics applies in process costing but not to job order costing? a. [dentifiable batches of production. b. Equivalent units of production c. Averaging process d. Use of standard cost

1. Which of the following characteristics applies in process costing but not to job order costing? a. [dentifiable batches of production. b. Equivalent units of production c. Averaging process d. Use of standard cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure. 

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.

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Question

Chapter 11 Average and FIFO Costing
335
MULTIPLE CHOICE -THEORIES
1. Which of the following characteristics applies in process costing but not to job
order costing?
a. [dentifiable batches of production.
b. Equivalent units of production
c. Averaging process
d. Use of standard cost
2. An equivalent unit of material or conversion cost is equal to
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 of
production into work in process
d. Fifty percent of the material or conversion cost of a unit of finished goods
inventory
3. 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
a. The same as the units placed in process
b. The same as the units completed
c. Less than the units placed in process
d. Less than the units completed
4. What are transferred-in costs as used in a process costing system?
a. Labor that is transferred from another department within the same plant
instead of hiring temporary workers from the outside.
b. Cost of the production of a previous internal process that is subsequently
´used in a succeeding internal process.
C. Supervisory salaries that are transferred from an overhead cost center to a
production cost center.
d. Ending work in process inventory of a previous process that will be used in a
succeeding process

Cost Accounting
5. 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
Normal
a..
No
Yes
b..
No
No
C..
Yes
Yes
d..
Yes
No
6. In the computation of manufacturing cost per equivalent unit, the weighted-
average method of process costing considers
a. Current costs only
b. Current costs plus cost of ending work-in-process inventory
c. Current costs plus cost of beginning work-in-process inventory
d. Current costs less cost of beginning work-in-process inventory
7. 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
a. 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.
b. 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
C. Started into process during the period, plus the number of units in process at
the beginning of the period.
d. Transferred out 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'item.

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1. What do you mean by process costing? Who uses process costing give the example of company with the product?
Two basic types of cost accounting systems are job order costing and process costing. True or False True False
Which one is a controllable cost? Select one: O a. Office salary Ob. Rent Factory Oc Office Rent O d. Cost of Raw material
Which one of the following is considered a basic similarity between job order cost and process cost systems? • Tracking costs through a series of processes of departments. • Unit cost computations. O The flow of costs through the accounts. O The point at which costs are totaled.
Process cost systems use job cost sheets. Select one: O a. FALSE O b. TRUE
Which of the following is a characteristic of the process costing method? a. Work in process inventory is restated in terms of completed units b. Costs are accumulated by order c. It is used by companies manufacturing custom machineries d. Standard cost is not applicable
So, what's the difference between job order and process costing? Describe a product manufactured under each system.
Which costing method is likely to provide the most accurate product cost? a. Volume-based costing using direct labor hours to allocate overhead b. Volume-based costing using a plantwide overhead rate c. Normal costing using a plantwide overhead rate d. Activity-based costing
Please explain the statement below thoroughly with examples. (Ture or False) "In activity-based costing, the manufacturing overhead cost per unit will depend partially on the number of units in a batch."