Cost Accounting

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CHAPTER 14: PROCESS COSTING AND THE COST ACCOUNTING CYCLE

Multiple Choice

c 1. ABC Company made the following journal entry.
Work in Process Inventory $200,000
Direct Labor $188,000 Direct Labor Rate Variance 12,000 From this entry we can tell that ABC uses
a. job-order costing.
b. process costing.
c. standard costing.
d. normal costing.

d 2. CDE Company made the following journal entry.
Finished Goods Inventory $250,000
Work in Process Inventory $250,000 From this entry we can tell that CDE uses
a. job-order costing.
b. process costing.
c. standard costing.
d. any of the above.

b 3. Which of the following is NOT relevant in determining weighted-average unit cost in process costing? a. Cost of beginning inventory.
b. Equivalent unit production in beginning inventory. c. Equivalent unit production in ending inventory.
d. Units completed.

d 4. Standard process costing does NOT require information about a. units completed during the period.
b. equivalent unit production in ending inventory.
c. standard cost per unit.
d. actual unit cost for the period.

d 5. A company that uses job-order costing
a. cannot use standard costs.
b. accumulates costs by department.
c. probably makes a single product.
d. does not have to calculate equivalent production.

c 6. Which company is most likely to use job-order costing? a. A brewery.
b. An automobile manufacturer.
c. A bridge builder.
d. A button manufacturer.

c 7. Which company is most likely to use process costing? a. A manufacturer of nuclear reactors.
b. A construction contractor.
c. A cannery.
d. A textbook publisher.

a 8. Fixed production costs are inventoriable only if a company a. uses absorption costing.
b. uses standard costing.
c. produces a single product.
d. receives permission from the Internal Revenue Service. d 9. Which cost accumulation method is most likely to be used by a company that mass produces similar products? a. Actual costing.

b. Normal costing.
c. Job-order costing.
d. Standard costing.

c 10. Standard costing can be used in
a. only job-order costing systems.
b. only process costing systems.
c. either job-order or process systems.
d. either manufacturing or retailing firms.

a 11. Which of the following is the same whether the company uses standard process costing or actual process costing? a. Equivalent production.
b. Cost of goods transferred from work in process to finished goods. c. Net income for the period.
d. Cost per unit of ending inventory of work in process.

c 12. It is usually necessary to calculate equivalent unit production for a. materials.
b. conversion costs.
c. materials and conversion costs.
d. materials, conversion costs, and overhead.

b 13. If a company uses actual process costing, the amount transferred from Work in Process Inventory to Finished Goods Inventory is the cost of a. equivalent unit production for the period.

b. units completed during the period.
c. units completed and sold during the period.
d. all units worked on during the period.

b 14. If a company uses standard process costing, the amount transferred from Work in Process Inventory to Finished Goods Inventory is the a. standard cost of equivalent unit production for the period. b. standard cost of units completed during the period. c. actual cost of units completed and sold during the period. d. actual cost of all units worked on during...
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