Chap008

Cost Management: Strategies for Business Decisions

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Unformatted text preview: Chapter 08 - Process-Costing Systems Chapter 08 Process-Costing Systems True / False Questions 1. In process-costing, material costs are not traced to individual units of output, as in job costing. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 1 2. Companies that produce products in continuous-flow production, such as paint and cereals use process-costing. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 1 3. Process-costing is used to help set selling prices, but is not used to determine inventory values for financial accounting. FALSE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 2 4. Conversion costs of resources used by processes generally occur at the unit-level of output. FALSE AACSB: Reflective Thinking AICPA BB: Critical Thinking Difficulty: Medium Learning Objective: 2 8-1 Chapter 08 - Process-Costing Systems 5. Conversion costs of resources used by processes can apply to all levels of the cost hierarchy. TRUE AACSB: Reflective Thinking AICPA BB: Critical Thinking Difficulty: Medium Learning Objective: 2 6. Temporary labor is normally a batch-level conversion cost. FALSE AACSB: Reflective Thinking AICPA BB: Critical Thinking Difficulty: Medium Learning Objective: 2 7. In process costing, material costs are traced to individual units of output. FALSE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 3 8. The first step in the process costing system is to compute the number of equivalent units produced. FALSE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 3 8-2 Chapter 08 - Process-Costing Systems 9. The first step in the process costing system is to summarize the physical flow of units. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 3 10. The basic cost flow model to help account for units processed during the period is beginning inventory plus transfers in minus transfers out equals ending inventory. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 3 11. Equivalent units represent the amount of physical units transferred to finished goods. FALSE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 3 12. Equivalent units represent the amount of work actually accomplished, expressed as the number of units that could have been fully completed. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 3 8-3 Chapter 08 - Process-Costing Systems 13. In process costing, two half-finished units equal one equivalent unit....
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Chap008 - Chapter 08 Process-Costing Systems Chapter 08...

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