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# 17 - 17 CHAPTER PROCESS COSTING SYSTEMS TRUE/FALSE 1...

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17: CHAPTER PROCESS COSTING SYSTEMS TRUE/FALSE 1. Examples of industries that would use process costing include the pharmaceutical and semiconductor industry. Answer: 2. True Difficulty: 1 Objective: 1 The principal difference between process costing and job costing is that in job costing an averaging process is used to compute the unit costs of products or services. Answer: False Difficulty: 2 Objective: The averaging process is used to calculate unit costs in process costing. 1 3. Process-costing systems separate costs into cost categories according to the timing of when costs are introduced into the process. Answer: True Difficulty: 2 Objective: 1 4. Estimating the degree of completion for the calculation of equivalent units is usually easier for conversion costs than it is for direct materials. Answer: False Difficulty: 2 Objective: 1 Estimating the degree of completion is easier for the calculation of direct materials since direct materials can be measured more easily than conversion costs. 5. Process-costing journal entries and job-costing journal entries are similar with respect to direct materials and conversion costs. Answer: True Difficulty: 2 Objective: 4 6. The accounting (for a bakery) entry to record the transfer of rolls from the mixing department to the baking department is: Work in Process-Mixing Department Work in Process-Baking Department Answer: False Difficulty: 2 Objective: The correct accounting entry is the opposite of the entry shown here. 4 7. The weighted-average process costing method does not distinguish between units started in the previous period but completed during the current period and units started and completed during the current period. Answer: True Difficulty: 2 Objective: 5 Chapter 17 Page 1 8. Equivalent units in beginning work in process + equivalent units of work done in the current period equals equivalent units completed and transferred out in the current period minus equivalent units in ending work in process. Answer: False Difficulty: 2 Objective: 5 The second part of the equation should be: equivalent units completed and transferred out in the current period PLUS equivalent units in ending work in process. 9. In the weighted-average costing method, the costs of direct materials in beginning inventory are not included in the cost per unit calculation since direct materials

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are almost always added at the start of the production process. Answer: False Difficulty: 2 Objective: 5 The costs of the direct materials are included in the cost per unit calculation. 10. The FIFO process costing method merges the work and the costs of the beginning inventory with the work and the costs done during the current period. Answer: False Difficulty: 2 FIFO only includes the work done during the current period. Objective: 6 11. The first-in, first-out process-costing method assumes that units in beginning inventory are completed during the current accounting period. Answer: True Difficulty: 2 Objective: 6 12. Process costing FIFO is usually applied to both the units entering a department and the units leaving a department. Answer: False
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17 - 17 CHAPTER PROCESS COSTING SYSTEMS TRUE/FALSE 1...

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