Chapter 4
When the weighted-average method of process costing is used, a department's equivalent units are computed by: A. adding the units transferred out to the equivalent units in ending inventory. B. subtracting the equivalent units in beginning inventory from the equivalent units in ending inventory. C. subtracting the equivalent units in beginning inventory from the equivalent units for work performed during the period. D. subtracting the equivalent units in beginning inventory from the sum of the units transferred out and the equivalent units in ending inventory.
A.
Which of the following companies would be most likely to use a process costing system? A. Movie studio. B. Furniture manufacturer C. Oil refinery. D. Hospital.
C
Costs in an operation costing system are accumulated by: A. by individual job. B. by department. C. by both job and departments. D. by neither job nor department.
C.
For which situation(s) below would an organization be more likely to use a process costing system of rather than a job-order costing system? A. a shop that restores old cars to "showroom" quality B. a masonry company that builds brick walls, bulkheads, and walkways designed by architects C. a paper mill that processes wood pulp into large rolls of paper D. a framing shop that builds picture frames to order for individual customers
C.
Pulo Corporation uses a weighted-average process costing system. The company has two processing departments. Production starts in the Assembly Department and is completed in the Finishing Department. The units completed and transferred out of the Assembly department during April will become the: A. units in April's ending work in process in Finishing. B. units in May's beginning work in process in Finishing. C. units started in production in Finishing for May. D. units started in production in Finishing for April.
D.
Which of the following statements about a process costing system is incorrect? A. In a process costing system, equivalent units are separately computed for materials and for conversion costs. B. In a process costing system, each processing department has a work in process account. C. In a process costing system, overhead can be underapplied or overapplied just as in job-order costing. D. In a process costing system, materials costs are traced to units of products.
D.
In a process costing system, equivalent units of production is calculated for each product.
False
In calculating cost per equivalent unit under the weighted-average method, prior period costs are not combined with current period costs.
False
Job-order costing uses several different WIP accounts for different processes.
False
Process costing is used in those situations where many different products or services are produced each period to customer specifications.
False
Under the weighted-average method, the equivalent units used to compute the unit costs of ending inventories relate only to work done during the current period.
False
When materials are purchased in a process costing system, a materials account is debited with the cost of the materials.
True