# Ch06 - Chapter 6 PROCESS COSTING MULTIPLE CHOICE Question...

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Chapter 6 PROCESS COSTING MULTIPLE CHOICE Question Nos. 1, 7-12, 18-23, and 28-32 are AICPA adapted. B 1. An equivalent unit of material or conversion cost is equal to: A. the prime cost B. the amount of material or conversion cost necessary to complete one unit of production C. a unit of work in process inventory D. the amount of material or conversion cost necessary to start a unit of production into work in process E. 50% of the material or conversion cost of a unit of finished goods inventory, assuming a linear production pattern B 2. The product flow format where certain portions of the work are done simultaneously and then brought together for completion is called: A. applied B. parallel C. standard D. selective E. sequential C 3. An item that does not appear on a cost of production report is: A. work in process C beginning inventory B. cumulative costs through the end of departmental production C. finished goods C ending inventory D. materials used in the department E. unit costs added by the department C 4. Goode Manufacturing has three producing departments in its factory. The ending inventory in the Milling Department consisted of 3,000 units. These units were 60% complete with respect to labor and factory overhead. Materials are applied at the end of the milling process. Unit costs for the complete process in the Milling Department are: materials, \$1; labor, \$2; and factory overhead, \$3. The appropriate unit cost for each unit in the ending inventory is: A. \$2 B. \$5 C. \$3 D. \$6 E. \$4 SUPPORTING CALCULATION: 60% (\$2 + \$3) = \$3 61

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62 Chapter 6 D 5. When added materials in subsequent departments result in an increase of the units produced, the unit transferred-in costs will: A. be reclassified as new materials B. be increased to provide for the additional units C. be accounted for under the fifo costing method D. be decreased as they are spread over more units E. remain unchanged E 6. Gyro Products transferred 10,000 units to one department. An additional 3,000 units of materials were added in the department. At the end of the month, 7,000 units were transferred to the next department. There was no beginning inventory. The costs for units transferred in would be effectively allocated over: A. 17,000 units B. 3,000 units C. 10,000 units D. 7,000 units E. 13,000 units SUPPORTING CALCULATION: 7,000 units transferred out + 6,000 units in ending inventory = 13,000 units E 7. A characteristic of a process costing system is that: A. costs are accumulated by order B. it is used by a company manufacturing custom machinery C. standard costs are not applicable D. it requires a lot more detailed accounting than does a job order system E. work in process inventory is restated in terms of completed units D 8. Transferred-in costs as used in a process cost accounting system are: A. supervisory salaries that are transferred from an overhead cost center to a production cost center B. ending work in process inventory of a previous process that will be used in
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## This note was uploaded on 08/20/2012 for the course CBEAM BSA taught by Professor Redencion during the Spring '12 term at De La Salle Lipa.

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Ch06 - Chapter 6 PROCESS COSTING MULTIPLE CHOICE Question...

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