Cost Accounting Chapter 6

There is no need to track materials to processes, in process costing system. True or False

False

As production occurs, materials, direct labor, and applied manufacturing overhead are recorded in

Work in process

Operation costing

a costing system that uses job-order costing to assign materials costs and process costing to assign conversion costs.

Batch production processes

a process that produces batches of different products that are identical in many ways but differ in others

Production Report

a report that summarizes the manufacturing activity for a department during a period and discloses physical flow, equivalent units, total costs to account for, unit cost computation, and costs assigned to goods transferred out and to units in ending work in process.

physical flow schedule

a schedule that accounts for all units flowing through a department during a period.

process

a series of activities (operations) that are linked to perform a specific objective.

FIFO costing method

a unit-costing method that excludes prior-period work and costs in computing current-period unit work and costs.

Weighted average costing method

a unit-costing method that merges prior-period work and costs with current-period work and costs.

In process costing, costs are accounted for by:

process

The appropriate cost accounting system to use when inventory items are produced on an assembly line is

process accounting

Equivalent units of output

the complete units that could have been produced given the total amount of productive effort expended for the period under consideration

Transferred-in cost

the cost of goods transferred in from a prior process.

Process-costing principle

the period's unit cost is computed by dividing the costs of the period by the output of the period.

JIT manufacturing emphasizes

All of these choices are correct

A process costing system is more expensive to maintain because it has more work-in-process accounts. True or False

False

The process that produces batches of different products which are idnentical in many ways but differ in others

Batch production process

Units to account for formula

Beginning work in process + units started

That which determine(s) whether the costs assigned to units transferred out and to units in ending work in process are equal to the costs in beginning work in process, plus the manufacturing costs incurred in the current period is(are) called:

Cost reconcilliation

Services can never be homogeneous and repetitevly produced. True or False

False

Services cannot have workin process inventories. True or False

False

The complete units that could have been produced given the total amount of productive effort expended for the period under consideration are the:

Equivalent units of output

Which of the following is true of the first-in, first-out costing method?

It uses only current output to calculate the current-period unit costs

What system would a manufacturer of unique special orders or batch processes most likely use to accumulate costs?

Job-order costing

Abnormal spoilage is treated differently from normal spoilage in what way?

Normal spoilage is absorbed as part of the product cost but abnormal spoilage costs are treated separately

A cost transferred from a prior process to a subsequent process is referred to as a:

Transferred-in cost

Some services may require that a sequence of uniform processes be performed. True or False

True

There is no need to use time tickets to assign costs to processes. True or False

True

Which of the following process costing methods is simpler to use?

Weighted average

The unit-costing method that merges prior-period work and costs with current-period work and costs is called:

Weighted average method

If a spoilage is normal (expected), the cost of spoiled units is:

added to the cost of goods units produced

Cost Reconciliation

determining whether the costs assigned to units transferred out and to units in ending work in process are equal to the costs in beginning work in process plus the manufacturing costs incurred in the current period.

"Total costs to account for" does NOT include which of the following costs?

ending work-in-process balance

The term given to units that represents the number of completed units that is equal, in terms of production inputs, to a given number of partially completed units is:

equivalent units

Unit cost of material for a department using the FIFO method of process costing is found by taking the total cost of materials issued to the department during the year divided by:

equivalent units of output

Spoilage in a process costing process means

fewer units leave the process than enter it.

Work orders

used to collect production costs for product batches and to initiate production.