Chapter 5

Fabian Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 9,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 90,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. During the month 87,000 units were completed in the Assembly Department and transferred to the next processing department. There were 12,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month? A. 89,400 B. 83,100 C. 93,000 D. 87,000

A

When the weighted-average method of process costing is used, a department's equivalent units are computed by: A. subtracting the equivalent units in beginning inventory from the equivalent units in ending inventory. B. adding the units transferred out to 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.

B

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

The Assembly Department started the month with 35,000 units in its beginning work in process inventory. An additional 472,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 34,000 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month? A. 471,000 B. 507,000 C. 473,000 D. 541,000

C

Which of the following companies would be most likely to use a process costing system? A. Movie studio. B. Hospital. C. Oil refinery. D. Furniture manufacturer

C

For which situation(s) below would an organization be more likely to use a process costing system rather than a job-order costing system? A. a masonry company that builds brick walls, bulkheads, and walkways designed by architects B. a shop that restores old cars to "showroom" quality C. a framing shop that builds picture frames to order for individual customers D. a paper mill that processes wood pulp into large rolls of paper

D

Which of the following statements about a process costing system is incorrect? A. In a process costing system, each processing department has a work in process account. B. In a process costing system, equivalent units are separately computed for materials and for conversion costs. 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

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 started in production in Finishing for April. B. units in May's beginning work in process in Finishing. C. units in April's ending work in process in Finishing. D. units started in production in Finishing for May.

a

In calculating cost per equivalent unit under the weighted-average method, prior period costs are not combined with current period costs.

false

In the weighted-average method, the equivalent unit is to measure the actual cost incurred in the production period.

false

Job-order costing uses several different WIP accounts for different processing departments.

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