AC 361 Chapter 4

Industries that convert raw materials into homogeneous products typically use __________ costing.

process

The activity in a processing department is performed:

uniformly on all units

When using process costing, each processing department has a separate _____________ account.

work in process

The direct method allocates service department costs:

directly to operating departments

Number of partially completed units x Percentage completion=

equivalent units

When using process costing, materials can be added _____________ processing department.

in any

Services provided between service departments are known as ____________ services.

interdepartmental

When many different jobs or products are worked on each period, the most likely costing system used is:

job-order

Direct labor plus manufacturing overhead equals __________ cost.

conversion

Methods to calculate departmental unit costs include:

- weighted average - FIFO

Work is performed on products, and materials, labor, and overhead costs are added to products in a(n) ___________ department.

processing

The method that provides for allocation of a service department's costs to other service departments, in a sequential manner is referred to as the ___________ method.

step-down

In process costing, manufacturing overhead costs are distributed to each department:

according to the amount of the allocation base incurred in the department

When computing the equivalent units of production under the weighted-average method, partially completed ___________ inventory is ignored.

beginning work in process

Equivalent units of production under the weighted-average method equal ___________.

equivalent units in ending work in process plus units transferred out

The two most commonly used methods for determining unit product costs are __________-__________ costing and __________ costing.

job-order process

The central purposes of an organization are carried out in the ___________ department.

operating

In situations where products have some common characteristics and some individual characteristics, ____________ costing is used.

operation

The two types of departments in large organizations are:

operating and service

A processing department is an organization unit:

where work is performed on a product, and materials, labor and overhead are added

When unit costs are transferred from department A to department B, department B will treat the costs as:

transferred in

Differences between job-order costing and process costing include that process costing:

- accumulates costs by department - is used for indistinguishable products

Similarities between job-order costing and process costing include the:

- basic purpose to assign and compute product costs - manufacturing accounts used - flow of costs through the manufacturing accounts

Examples of operating departments include:

- production department at a manufacturer - surgery department at a hospital - geography department at a university