Chapter 4 Systems Design: Process Costing
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 equiv
Standard Costing and
What is "STANDARD"?
standard is a performance benchmark
or norm used for planning and control
Standards specify the expected costs and
quantities needed to manufacture a
single unit of product or perform
1. Process costing is used in those situations where many different products or services are
produced each period to customer specifications.
2. The basic approach in job-order costing is to accumulate costs in a parti
Financial and Managerial Accounting: Seven Key Differences
External persons who
make financial decisions
Managers who plan for
and control an organization
Far Eastern University-Makati
Which of the following organizations would be most likely to use a job order costing system?
a. the loan department of a bank
b. the check clearing department of a bank
c. a manufactur
1. An inventory item of XYZ Manufacturing has an average daily demand of 10 units with a maximum
daily demand of 12 units. The economic order quantity is 200 units. Without safety stocks, the reorder
point is 50 units. Safety stocks are set at 94 units.