Cost accoutning

Topics: FIFO and LIFO accounting, Cost accounting, Inventory Pages: 157 (12348 words) Published: February 27, 2014
Chapter 6--Process Costing
Student: ___________________________________________________________________________ 1. A process is a series of activities or operations, which are linked to perform a specific objective.  True    False

 
2. The cost flows for a process-costing system are totally different from those of a job order costing system.  True    False
 
3. Process systems are characterized by a larger number of homogeneous products passing through a series of processes.  True    False
 
4. The production report is the document that summarizes the manufacturing activity that takes place in a work-in-process department.  True    False
 
5. Many service organizations and just-in-time (JIT) manufacturing firms operate in an environment without work-in-process inventories.  True    False
 
6. Services that are basically homogeneous and repetitive cannot take advantage of a process-costing approach.  True    False
 
7. In JIT manufacturing, work cells are created that produce a product from start to finish.  True    False
 
8. In firms with ending work-in-process inventories, output is measured using equivalent units.  True    False
 
9. Equivalent units are the incomplete units that could have been produced given the total amount of effort expended.  True    False
 
10. In a process-costing system, work-in-process inventory, materials are added uniformly so that multiple calculations of equivalent units are needed for each type of input.  True    False
 
11. The FIFO costing method recognizes that the work and costs carried over from the prior period legitimately belong to that period.  True    False
 
12. FIFO follows the job-order costing principle. 
True    False
 
13. The FIFO method unit costs are used to value output that is related to future periods.  True    False
 
14. The weighted average method treats the equivalent output and costs in beginning work-in-process inventories as if they belong to the current period when calculating unit cost.  True    False
 
15. In a process-costing system, the costing of goods transferred out in BWIP inventory is difficult because there are multiple categories of completed units.  True    False
 
16. The major benefit of the weighted average method is simplicity. The major disadvantage is that accuracy and performance measurements are impaired.  True    False
 
17. Transferred-in goods, must be converted to the units of measure used by the current department.  True    False
 
18. For the receiving department of a process-costing manufacturer, transferred-in goods are materials that are added at the end of the process.  True    False
 
19. In calculating equivalent units of production using the weighted average method, the transferred-in goods are treated as materials added at the beginning of the process.  True    False
 
20. When manufacturing companies exhibit characteristics of both job and process environments, they use batch production processes.  True    False
 
21. Operation costing uses a blend of job-order and process-costing procedures whenever batches of dissimilar products are produced.  True    False
 
22. In operation costing, job-order procedures are used to assign direct materials costs and process procedures are used to assign conversion costs.  True    False
 
23. When spoilage is assumed to be normal, it is not tracked separately, it is simply included in the total cost of good units.  True    False
 
24. Spoilage in a process costing process means that more units enter the process than leave it.  True    False
 
25. Abnormal spoilage costs are treated the same as normal spoilage for process costing.  True    False
 
26. The accounting system which accumulates production costs by process and uses a work-in-process account for each process is called __________ .  ________________________________________
 
27. The basic characteristics of process costing include: cost flows, journal entries, and the...
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