Cost 3300 Chap 8

An operation is a standardized method of making a product repeatedly performed (CORRECT)

1. Every company follows a standard costing method mandated by regulators. 2. The system that costs the most should be adopted because it provides the most accurate information. 3. In practice, only one of the production methods can be found.

Operation costing system:

1. Is a hybrid system. 2. Treats materials costs using job order costing method. 3. Treats conversion costs using process costing approach

Zahn Industries uses process costing system. During October, the finishing department had 30,000 units in beginning work-in-process inventory and 45,000 units in ending work in process inventory. During the month, 95,000 units were transferred in from the previous department. Materials are added at the end of the process and conversion costs are added uniformly throughout the process. Beginning work-in-process was 20% complete with respect to conversion costs; ending inventory was 40% complete with respect to conversion costs. If Zahn uses weighted-average costing, the equivalent units of production for materials and conversion costs are:

80,000 and 98,000.

Which of the following statements regard operations costing is not correct?

Any given company must choose between a job order costing system, a process costing system, or an operation costing system.

If computational and record-keeping costs are about the same under both FIFO and weighted-average costing, which method, if any, will generally be preferred?

FIFO Costing

In order to compute equivalent units of production, which of the following must be reasonably estimated?

The percentage of completion

Total costs to be accounted for include:

costs in beginning work-in-process inventory plus current period costs.

When compared with job costing, process costing is characterized by:

less detailed record-keeping.