Chapter 6
45. The _________________________ combines beginning inventory costs and work done with current-period costs and
work done to calculate this period’s unit cost.
46. The number of physical units is multiplied by the _____________________ to calculate equivalent units.
Chapter 6
47. The _______________________ separates work and costs of the equivalent units in beginning inventory from work
and costs of the equivalent units produced during the current period.
48. The _____________________ provides an analysis of the physical flow of units.
49. If great accuracy in computing unit costs is desired, a company should use the _________ method to determine unit
cost.
Chapter 6
50. _____________________ checks to see if the costs to account for are exactly assigned to inventories.
51. Under the _______________ method equivalent units of output are computed by adding units completed to equivalent
units in ending working-in-process.
Chapter 6
52. When inputs are added _______________, equivalent units and unit cost are calculated for each separate input
category.
53. If changes occur in the ________ of the manufacturing inputs from one period to the next, then FIFO produces a more
accurate unit cost than does the weighted average method.
Chapter 6
54. Under the _________________ method there are two categories of completed units; units started and completed
during the period and units from beginning inventory.
55. Which type of costing system works best with a large number of homogeneous products?
a. job-order costing
b. process costing
c. sequential costing
d. parallel costing
56. Which of the following businesses is most likely to use process costing?
a. chemical plant
b. architectural firm
Chapter 6
c. dentist’s office
d. manufacturer of fine furniture
57. Which of the following businesses is most likely to use process costing?
a. custom home builder
b. CPA firm
c. chemical manufacturer
d. custom machine tools manufacturer
58. Manufacturers that produce a large number of homogeneous products are most likely to use which of the following?
a. job-order costing
b. process costing
c. sequential costing
d. parallel costing
Chapter 6
59. Which of the following companies would be least likely to use a process costing system?
a. an oil refinery
b. a home-builder
c. a fertilizer company
d. a chemical company
60. What types of costs are normally found in a process accounting system?
a. materials, labor and overhead
b. materials and labor
c. labor and overhead
d. overhead, selling and administrative
Chapter 6
61. The cost of units finished at the last (final) department will flow from work in process to:
a. raw materials
b. finished goods
c. cost of goods sold
d. accounts receivable
62. Which of the following best describes sequential processing?
a. It is a processing pattern in which units pass from one process to another in a set order.
b. In sequential processing, several sequences of production are applied to a product in the department.
c. Sequential processing requires two or more sequential processes to produce a finished good.
d. Sequential processing requires two or more sequential processes to produce a finished good.
Chapter 6
63. Which of the following is true of parallel processing?
a. In parallel processing, a large number of heterogeneous products pass through an identical set of processes.
b. It is a processing pattern in which units are subjected to the different operations for a given process.
c. It is a processing pattern in which two or more sequential processes are required to produce a finished product.
d. In parallel processing, each unit produced in a period receives the unit cost at a varying rate.
64. Which is the best description of the production report?
a. The production report provides information about the manufacturing costs incurred by the department.
b. The report provides information about the physical units processed by the department.
c. The production report is the document that summarizes the manufacturing activity that takes place in a process
department for a given period of time.
d. None of these.
Chapter 6
65. Process costing can be appropriate for:
a. firms manufacturing heterogeneous products.
b. manufacturing firms with just-in–time ( JIT) orientation to determine product costs.
c. firms manufacturing products as per customers’ order.
d. all of these.
66. Process costing would be most appropriate for which of the following?
a. soft drink bottler
b. custom home builder
c. caterer
d. photocopy shop
Chapter 6
67. In process costing, the cost of units finished in the last department will be transferred from work in process to
a. cost of goods sold.
b. completed processes.
c. finished goods.
d. sales.
68. Process accounting is most probably used by a(n)
a. paint manufacturer
b. cement manufacturer
c. oil change and lube shop
d. All of these.
Chapter 6
69. When should process costing techniques be used in assigning costs to products?
a. If the firm manufactures heterogeneous products
b. If the products are repetitively produced
c. If the products are manufactured according to customer specifications
d. All of these
70. Direct materials used in production, direct labor, and applied overhead are charged to the:
a. raw materials account.
b. overhead account.
c. work in process account.
d. indirect labor account.
Chapter 6
71. An accountant calculates unit cost from:
a. conversion costs and indirect labor.
b. the total output of a period and the total costs for that period.
c. the total prime cost for a period and the direct materials used in that period.
d. direct labor and manufacturing overhead.
72. How is unit cost calculated?
a. It is calculated by multiplying total units by total costs.
b. It is calculated by adding all cost drivers.
c. It is calculated by subtracting the ending work in process from the total sales of the period.
d. It is calculated by dividing the total costs for the period by the total output of the period.
Chapter 6
73. In process manufacturing, partially completed goods received from prior departments are referred to as:
a. transferred-in goods.
b. finished goods
c. equivalent units.
d. units in ending work-in–process.
74. A cost received by a subsequent process from a prior process is referred to as a:
a. cost of ending work-in-process.
b. cost of goods transferred out.
c. transferred-in cost.
d. cost of beginning work-in–process.
Chapter 6
75. Equivalent production expresses all activity of the period in terms of
a. work in process
b. materials, labor and overhead
c. fully completed units
d. partially completed units
76. Two methods used to determine equivalent units of production in process costing are
a. weighted average and FIFO
b. FIFO and LIFO
c. weighted average and LIFO
d. weighted average and exact costing
Chapter 6
77. Which of the following methods uses costs and work of beginning work in process?
a. weighted average method
b. FIFO method
c. sequential processing method
d. both the weighted average and FIFO methods
78. Which statement best describes the concept of equivalent units of production?
a. Equivalent units are a measure of a period’s output.
b. Equivalent units are the units completed in a department.
c. Equivalent units are the total of the units produced by all departments.
d. Equivalent units are the number of units completed at the end of the last process.
Chapter 6
79. When computing equivalent units of production, the method that combines partially completed units in beginning
inventory with current period production is the
a. FIFO method
b. LIFO method
c. weighted average method
d. actual cost method
80. The Fox Company uses the weighted average method. The beginning work in process consists of 20,000 units (100%
completed as to materials and 50% complete as to conversion costs). The number of units completed was 80,000. The
ending work in process consists of 10,000 units (100% complete as to materials and 20% complete as to conversion
costs). Calculate the equivalent units of production for conversion costs.
a. 110,000
b. 82,000
c. 80,000
d. 90,000
Chapter 6
81. Beginning inventory for the month contained 2,000 units that were 70% complete with respect to materials. During the
month, 60,000 units were completed and transferred out. Ending inventory contained 3,000 units, 20% complete with
respect to materials. The weighted average equivalent units of production for materials for the month would be
a. 62,400
b. 63,000
c. 60,600
d. 60,000
82. Estimating the degree of completion of ending work in process requires:
a. judgement and ethical behavior
b. The degree of completion of beginning work in process
c. adjusting the degree of completion of completed units
d. use of the weighted average method
Chapter 6
83. Beginning inventory for the month contained 3,000 units that were 60% complete with respect to materials. During the
month, 50,000 units were completed and transferred out. Ending inventory contained 5,000 units, 30% complete with
respect to materials. The weighted average equivalent units of production for materials for the month would be
a. 50,000
b. 51,500
c. 50,300
d. 49,500
84. Following is the information of Unicorn Inc. for the month of June:
Chapter 6
Units
Work in process, June 1 (25% complete) 4,400
Started in June 35,200
Work in process, June 30 (35% complete) 13,200
Materials are added at the beginning of the process.
The equivalent units of production for conversion costs using the weighted average method would be:
a. 35,600.
b. 34,800.
c. 36,000.
d. 31,020.
85. Following is the information about Kartval Enterprises’s equivalent units in May:
Units
Beginning work-in-process (45% complete) 2,300
Units started during May 9,200
Units completed and transferred 8,625
Ending work-in–process (60% complete) 2,875
Using the weighted average method, calculate Kartval Enterprises’s equivalent units for May.
a. 7,150
b. 10,350
c. 10,235
d. 19,545