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Chapter 4 Systems Design Process Costing

Chapter 4 Systems Design Process Costing - Chapter 4...

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Chapter 4 Systems Design: Process Costing Garrison, Managerial Accounting, 12th Edition 125 True/False Questions 1. When materials are purchased in a process costing system, a work in process account is debited with the cost of the materials. Answer: False Level: Easy LO: 1 2. Any difference in the equivalent units calculated under the weighted-average and the FIFO methods is due to the units in the ending work in process inventory. Answer: False Level: Easy LO: 2,6 Appendix: 4 3. The equivalent units in beginning work in process inventory plus the equivalent units for the work done during the period equals the units transferred out plus the equivalent units in ending work in process inventory. Answer: True Level: Hard LO: 2 4. There is no difference in the unit costs computed under the weighted-average and FIFO methods of process costing if there are no beginning work in process inventories. Answer: True Level: Hard LO: 4,8 Appendix: 4 5. Under the weighted-average method of process costing, costs from the prior period are averaged with those of the current period in computing unit costs. Answer: True Level: Medium LO: 4 6. In a process costing production report, the “Cost to be accounted for” will be the same whether the weighted-average or the FIFO method is used. Answer: True Level: Medium LO: 5,9 Appendix: 4 7. Under the FIFO method of product costing, equivalent units of production consider units in the beginning inventory as if they were started and completed during the current period. Answer: False Level: Medium LO: 6 Appendix: 4
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