Multiple Choice Questions
1. Process costing works well whenever
a. Heterogeneous products pass through a series of processes and receive different doses of materials, labor, and overhead.
b. Material cost is accumulated by process and conversion cost is accumulated by process.
c. Homogeneous products pass through a series of processes and receive similar doses of conversion inputs and different doses of material inputs.
d. Homogeneous products pass through a series of processes and receive similar amounts of materials, labor, and overhead.
e. None of the above.
2. Job-order costing works well whenever
a. Homogeneous products pass through a series of processes and receive similar doses of conversion inputs and different doses of material inputs.
b. Homogeneous products pass through a series of processes and receive similar doses of materials, labor, and overhead.
c. Heterogeneous products pass through a series of processes and receive different doses of materials, labor, and overhead.
d. Material cost is accumulated by process and conversion cost is accumulated by process.
3. Sequential processing is characterized by
a. A pattern where partially completed units are worked on simultaneously.
b. A pattern where partially completed units must pass through one process before they can be worked on in later processes.
c. A pattern where different partially completed units must pass through parallel processes before being brought together in a final process.
d. A pattern where partially completed units must be purchased from outside suppliers and delivered to the final process in a sequential time mode.
e. None of these.
4. To record the transfer of costs from a prior process to a subsequent process, the following entry would be made:
a. Debit Finished Goods and credit Work in Process.
b. Debit Work in Process (subsequent department) and credit Transferred-In Materials.
c. Debit Work in Process (prior department) and credit Work in Process (subsequent department).
d. Debit Work in Process (subsequent department) and credit Work in Process (prior department)
e. None of the above.
5. The costs transferred from a prior process to a subsequent process are
a. Treated as another type of conversion cost.
b. Referred to as transferred-out costs (for the receiving department).
c. Referred to as the cost of goods transferred in (for the transferring department).
d. All of the above.
e. None of the above.
6. During the month of May, the grinding department produced and transferred out 2,000 units. EWIP had 500 units, 40 percent complete. There was no BWIP. The equivalent units of output for May are
a. 2,000.
b. 2,500.
c. 2,300.
d. 2,200.
e. None of these.
Use the following information for Multiple-Choice Exercises 17-7 through 17-9:
The mixing department incurred $30,000 of manufacturing costs during the month of September. The department transferred out 2,000 units and had 500 equivalent units in EWIP. There was no BWIP.
7. The unit cost for the month of September is
a. $12.
b. $10.
c. $24.
d. $120.
e. $100.
8. The cost of goods transferred out is
a. $20,000.
b. $24,000.
c. $28,800.
d. $18,000.
e. None of these.
9. The cost of EWIP is
a. $600.
b. $4,800.
c. $4,000.
d. $8,800.
e. None of these.
10. During May, Kimbrell Manufacturing completed and transferred out 100,000 units. In EWIP, there were 25,000 units, 40 percent complete. Using the weighted average method, the equivalent units are
a. 100,000 units.
b. 125,000 units.
c. 105,000 units.
d. 110,000 units.
e. 120,000 units.