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Exam 4: Process Costing

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Question 1

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Which of the following items is not a characteristic of a process cost system?

A) Once production begins, it continues until the finished product emerges.
B) The products produced are heterogeneous in nature.
C) The focus is on continually producing similar products.
D) When the finished product emerges, all units have exactly the same amount of materials, labour, and overhead.

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Question 2

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Use the following information for questions A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process.For the month of January, there were no units in the beginning work in process inventory; 10,000 units were started into production in January; and there were 4,000 units that were 60% complete in the ending work in process inventory at the end of January.The weighted average method is used. -What were the equivalent units of production for materials for the month of January?

A) 8,400 equivalent units
B) 14,000 equivalent units
C) 10,000 equivalent units
D) 4,000 equivalent units

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Question 3

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In a process cost system, labour and overhead can be added in any production department; however, materials are only added in the first department.

Which of the following is true of a process cost system?

The accumulation of the three manufacturing cost elements to Work in Process in a process cost system differs significantly from how they are assigned in a job order cost system.

Under the weighted-average method, the physical units in a department are the actual units in a department regardless of the degree of any work performed.

A production cost report is an internal document for management that shows production quantity and cost data for a particular production department.

Use the following information to answer questions In the month of March, a department had 8,000 units in beginning work in process that were 75% complete.During March, 30,000 units were transferred into production from another department.At the end of March there were 2,000 units in ending work in process that were 75% complete.Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process.The weighted average method is used. -How many units were transferred out of the process in March?

In process manufacturing, units are mass produced in a continuous fashion.

There are no units in process at the beginning of the period, 500 units in process at the end of the period that are 30% complete, and 3,000 units transferred out during the period.Based on this information, there were 3,500 units started during the period under the weighted-average method.

What document is used to summarize costs in process cost accounting?

Use the following information to answer questions In the month of March, a department had 8,000 units in beginning work in process that were 75% complete.During March, 30,000 units were transferred into production from another department.At the end of March there were 2,000 units in ending work in process that were 75% complete.Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process.The weighted average method is used. -How much are equivalent units of production for materials for March?

A product requires processing in two departments, Department 22 and then Department 23, before it is completed.What happens to costs transferred out of Department 22?

Swick Industries uses a process cost system.The company assigned manufacturing overhead costs to production.What transaction was recognized?

In order to calculate the physical unit flow, a company must first calculate the equivalent units of production.

Process cost systems are used to apply costs to merchandise inventory.

Equivalent units of production is an expression of the number of units that would have been started and finished if all of the effort were directed at that purpose.

Unit production costs must be calculated before the equivalent units of production can be calculated.

Which one of the following is a true statement about process cost systems?

Process cost accounting focuses on the process involved in manufacturing products that are very unique in nature.