The costs incurred in a process costing system, direct material, direct labor and overhead, are the same as the costs incurred in a job order costing system.LO1 – True LO: 1, Bloom: C, U
Trang 1T2 – Topic Focus: Process Costing TRUE-FALSE STATEMENTS
1 Companies that mass produce similar products or employ a continuous production process typically use a process costing system
Trang 28 The costs incurred in a process costing system, direct material, direct labor and overhead, are the same as the costs incurred in a job order costing system.
LO1 – True
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
9 The inventories used in a process costing system include work-in-process and finished goods, but
not raw materials.
LO1 – False – The inventories used in a process costing system include raw materials, work-in-process and finished goods
LO: 1, Bloom: K, Unit: TF02-1, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication, IMA: Cost Management
10 The inventories used in a process costing system are the same as those used in a job order costing system
LO1 – False – Direct materials may be added at different points of the department’s production process
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
14 In process costing, direct materials may be added at different points of a department’s
Trang 316 The journal entries used to record cost flows in a process costing system differ from those used
to record cost flows in a job order costing system
LO1 – False – The journal entries used to record cost flows in a process costing system are the same as those used to record cost flows in a job order costing system
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
17 Both the process costing and job order costing systems accumulate product costs throughout theproduction process and assign those costs to individual units of production
LO1 – False – Job order costing tracks individual product costs
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Difficult, Min: 1, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
19 When there is no work in process inventory at the end of a period, cost accumulation and reporting is extremely easy under process costing, as the product costs are simply added up and divided evenly among the products produced
LO1 – False - When work is in process at the end of an accounting period, cost accumulation and
reporting is more complicated as cost must be assigned to the completed units and to the partially completed units that remain in work in process inventory
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Difficult, Min: 1, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
21 Equivalent units (EU) of production is based on the percentage of completion for work in processinventory at the end of the period
Trang 423 In a process costing system, labor and overhead costs are typically combined and referred to as equivalent costs.
LO2 – False – In a process costing system, labor and overhead costs are typically combined and referred
Trang 5c Either process or job order
d Neither process nor job order
a Job order costing system
b Accumulation costing system
c Departmental costing system
d Process costing system
30 Which of the following types of entities would probably use a process costing system?
a Automobile repair shop
Trang 631 Which of the following types of entities would probably use a process costing system?
c Cost of goods sold
d All of these answer choices are used in a process costing system
35 In a job order costing system, the costs of each job are accumulated on a
a Job cost sheet
b Departmental cost sheet
c End-of-job accumulation sheet
d None of these answer choices are correct
a Raw materials inventory
b Work in process inventory
Trang 7c Finished goods inventory
d Cost of goods sold
LO1 – A
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Moderate, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
37 In a process costing system, when raw materials are moved into the mixing department, in which
of the following balance sheet accounts is it recorded?
a Raw materials inventory – mixing
b Work in process inventory – mixing
c Finished goods inventory – mixing
d Cost of goods sold
LO1 – B
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Moderate, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
38 Which of the following is a similarity between job order costing and process costing systems?
a Both accumulate product costs throughout the production process and assign those costs to individual units of production
b Both track individual product costs
c Both accumulate product costs in each production department during the period
d Both accumulate costs on a job cost sheet
LO1 – A
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Moderate, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
39 Which of the following is a similarity between job order costing and process costing systems?
a Both mass-produce identical products
b Both accumulate direct materials, direct labor and manufacturing overhead costs
c Both accumulate product cost on a departmental production report
d None of these answer choices are similarities between job costing and process costing systems
LO1 – B
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Moderate, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
40 Which of the following is a similarity between job order costing and process costing systems?
a Both accumulate costs on a job cost sheet
b Both accumulate product costs in each production department during the period
c Both systems track cost flows from raw materials to work in process, from work in process to finished goods, and from finished goods to cost of goods sold
d Both produce many different types of products, often to customer specifications
LO1 – C
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Moderate, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
Trang 841 Which of the following is a similarity between job order costing and process costing systems?
a Both accumulate product costs throughout the production process and assign those costs to individual units of production
b Both accumulate direct materials, direct labor, and manufacturing overhead costs
c Both track cost flows from raw materials to work in process, from work in process to finished goods, and from finished goods to cost of goods sold
d All of these answer choices are similarities between job costing and process costing systems
LO1 – D
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Moderate, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
42 Which of the following is a difference between job order costing and process costing systems?
a Companies that use a process costing system mass-produce identical products while companies that use a job order costing system produce many different types of products
b Companies that use a process costing system accumulate product costs throughout the production process while companies that use a job order costing system accumulate product cost only at the end of the production process
c Companies that use a process costing system accumulate direct material and direct labor, but not manufacturing overhead while companies that use a job order costing systems accumulate direct material, direct labor and manufacturing overhead
d All of these answer choices are differences between process costing and job order costing systems
LO1 – A
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Difficult, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
43 Which of the following is a difference between job order costing and process costing systems?
a Companies that use a process costing system accumulate product costs throughout the production process while companies that use a job order costing system accumulate product cost only at the end of the production process
b Companies that use a process costing system accumulate product costs in each
production department and allocate the costs evenly across all units produced in the department during the period while companies that use job order costing accumulate product costs by job and allocate those costs only to the units in that particular job
c Companies that use a process costing system accumulate direct material and direct labor, but not manufacturing overhead while companies that use a job order costing systems accumulate direct material, direct labor and manufacturing overhead
d All of these answer choices are differences between process costing and job order costing systems
LO1 – B
LO: 1, Bloom: C, Unit: TF02-1, Difficulty: Difficult, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
Trang 944 Which of the following is a difference between job order costing and process costing systems?
a Companies that use a process costing system accumulate product costs throughout the production process while companies that use a job order costing system accumulate product cost only at the end of the production process
b Companies that use a process costing system accumulate direct material and direct labor, but not manufacturing overhead while companies that use a job order costing systems accumulate direct material, direct labor and manufacturing overhead
c Companies that use a process costing system accumulate product costs on the
departmental production report while companies that use a job order costing system accumulate product costs on the job cost sheet
d All of these answer choices are differences between process costing and job order costing systems
a Actual units of production
b Particular units of production
c Equivalent units of production
Trang 1048 At the end of January, Monroe Industries had completed 65,000 units and left 8,000 units in Work In process, 60% complete with respect to materials and 80% complete with respect to conversion Conversion costs will be assigned to how many equivalent units in the ending work
Solution: 8,000 units x 80% = 6,400 equivalent units
49 The mixing department of the Glasson Company started the month with 20,000 units in its beginning work in process inventory An additional 309,000 units were transferred into the mixing department during the month At the end of the month 29,000 units were in ending work
in process inventory in the mixing department How many units were transferred out of the mixing department during the period?
50 On December 31, Berry Company recorded the following information in the Mixing
Department’s Work in Process account:
Completed and transferred to Packaging 95,000
Assume that the unfinished units in ending inventory are 60% complete for both materials and conversion What is the cost per equivalent unit?
Trang 1151 On December 31, Berry Company recorded the following information in the Mixing
Department’s Work in Process account:
Completed and transferred to Packaging 95,000
Assume that the unfinished units in ending inventory are 60% complete for both materials and conversion What is balance in the ending Work in Process on December 31?
52 On March 31, Morgan Company recorded the following information in the Assembly
Department’s Work in Process account:
Completed and transferred to Packaging 90,000
Assume that the unfinished units in ending inventory are 80% complete for both materials and conversion What is the total cost assigned to ending work in process?
Trang 1253 Bemis Corporation’s Assembly Department had 2,000 units in beginning inventory that were 70% complete with respect to conversion An additional 60,000 units were transferred into Assembly during the period Assembly had 12,000 units remaining in work in process at the end
of the period These units were 60% complete with respect to conversion What were the equivalent units for conversion?
Solution: 2,000 + 48,000 + (12,000 x 60%) = 57,200 equivalent units
54 Which of the following is not a step in calculating the unit product cost?
a Calculate the equivalent units of production
b Allocate the equivalent unit costs of production
c Divide the total equivalent costs by the total units
d Reconcile the costs of production
LO4 – C
LO: 4, Bloom: K, Unit: TF02-5, Difficulty: Easy, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
55 Which of the following is not a step in calculating the unit product cost?
a Calculate the physical unit flow
b Calculate the equivalent units of production
c Calculate the cost per equivalent unit
d Multiply the physical unit flow by the equivalent unit cost
LO4 – D
LO: 4, Bloom: K, Unit: TF02-5, Difficulty: Easy, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
56 When using a process costing system, the formula to reconcile the physical unit flow is
a Beginning WIP units + Units started = Units transferred out + Ending WIP units
b Beginning WIP units + Units transferred out = Units started + Ending WIP units
c Units started – Beginning WIP units= Units transferred out + Ending WIP units
d Beginning WIP units + Units transferred out = Units started – Ending inventory
a The units may be in different departments at the end of the period
b The units may not be at the same stage of completion
c The conversion cost may have been added at the beginning of the process
d None of these answer choices are correct
LO4 – B
LO: 4, Bloom: C, AN, Unit: TF02-5, Difficulty: Difficult, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
Trang 1358 To determine the equivalent units produced,
a Multiply the percentage of completion for each cost category by the number of physical units in the ending work in process inventory
b Divide the percentage of completion for each cost category by the number of physical units in the ending work in process inventory
c Add the cost of production to beginning work in process inventory and divide this total
by the physical units transferred out
d Multiply the number of physical units in ending work in process by the cost per physical units
LO3 – A
LO: 3, Bloom: K, Unit: TF02-3, Difficulty: Moderate, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management
59 When using a process costing system, the formula for reconciling the costs of production is
a Beginning WIP balance + Costs transferred out during the period + Ending WIP = Total costs accounted for
b Beginning WIP balance + Cost added during the period = Cost transferred out during the period + Ending WIP balance
c Cost added during the period – Beginning WIP balance = Cost transferred out during the period + Ending WIP balance
d Beginning WIP balance + Cost transferred out – Ending inventory = Total costs to accounted for
LO4 – B
LO: 4, Bloom: K, Unit: TF02-5, Difficulty: Easy, Min: 2, AACSB: Analytic, AICPA FN: Measurement, AICPA PC: Problem Solving and Decision Making, IMA: Cost Management