KA2e_SelfStudy_Ch16

KA2e_SelfStudy_Ch16 - File:ch16,Chapter16:ProcessCosting...

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Multiple Choice 1. Which of the following items is not characteristic of a process cost system? a) Once production begins, it continues until the finished product emerges. b) The products produced are heterogeneous in nature. c) The focus is on continually producing homogeneous products. d) When the finished product emerges, all units have precisely the same amount of materials, labor, and overhead. Ans: b Response A: In process costing, once production begins, it continues until the finished product emerges. Response B: Correct! The products produced are homogeneous, not heterogeneous, in nature. Response C: In process costing, the focus is on continually producing homogeneous products. Response D: In process costing, when the finished product emerges, all units have precisely the same amount of materials, labor, and overhead. 2. Indicate which of the following statements is not correct. a) Both a job order and a process cost system track the same three manufacturing cost elements – direct materials, direct labor, and manufacturing overhead. b) In a job order cost system, only one work in process account is used, whereas in a process cost system, multiple work in process accounts are used. c) Manufacturing costs are accumulated the same way in a job order and in a process cost system. d) Manufacturing costs are assigned the same way in a job order and in a process cost system. Ans: d Response A: This statement is true, in both a job order and a process cost system the same three manufacturing cost elements – direct materials, direct labor, and manufacturing overhead are tracked, the costs are not assigned in the same manner. Response B: This statement is true, in a job order cost system, only one work in process account is used, whereas in a process cost system, multiple work in process accounts are used. Response C: This statement is true, manufacturing costs are accumulated the same way in a job order and in a process cost system. Response D: Correct! Manufacturing costs are not assigned the same way in a job order and in a process cost system. 3. In a process cost system, the flow of costs is: a) work in process, cost of goods sold, finished goods. b) finished goods, work in process, cost of goods sold. c) finished goods, cost of goods sold, work in process. d) work in process, finished goods, cost of goods sold. Ans: d Response A: The correct flow of costs is work in process, finished goods, and then cost of goods sold. Response B: The correct flow of costs is work in process, finished goods, and then cost of goods sold. Response C: The correct flow of costs is work in process, finished goods, and then cost of goods sold. Response D: Correct! The flow of costs is work in process, finished goods, and then cost of goods sold.
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This note was uploaded on 04/22/2009 for the course BCOR 2000 taught by Professor Brush during the Spring '07 term at Colorado.

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KA2e_SelfStudy_Ch16 - File:ch16,Chapter16:ProcessCosting...

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