1) A process costing system is most likely used by which of the following?

• airplane manufacturing
• an accounting firm specializing in tax returns
• a hospital
• a paper manufacturing company

2) Which of the following is a conversion cost?

• raw materials
• direct material used
• sales commissions
• direct labor

3) Which isnotneeded to compute equivalent units of production?

• the percentage of completion for inventory still in process
• the number of units started and completed
• the material cost per unit
• the number of units transfered out

4) What is the conversion cost to manufacture insulated travel cups if the costs are: direct materials, $17,000; direct labor, $33,000; and manufacturing overhead, $70,000?

• $120,000
• $103,000
• $50,000
• $16,000

5)Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the rate of 100% of the direct labor cost. What is the value of the inventory transferred to the next department if beginning inventory was 2,000 units; 9,000 units were started; and 1,000 units were in ending inventory?

• $130,000
• $13,000
• $1,000
• $20,000

6) The initial processing department had a beginning inventory of 750 units and an ending inventory of 1,350 units, and it started 9,500 units into production. How many were transferred out the next department?

Suggestion:insert information given in the question and do the math to solve:

Beginning Inventory_____________________

Started in Production______________________

Units to account for______________________

Transferred out_______________________

Ending inventory_______________________

• 10,250
• 1,350
• 750
• 8,900

7) The costs to be accounted for consist of which of the following?

• costs of the units in ending inventory
• costs in the beginning inventory and costs added during the period
• costs added during the period
• costs started and transferred during the period

8) The journal entry to record the $500 of work in process ending inventory that consists of $300 of direct materials, $50 of manufacturing overhead, and $150 of direct labor is which of the following?

A)Work in process Inventory500

Accounts Payable500

B) Work in Process Inventory500

Materials Inventory300

Wages Payable150

Manufacturing Overhead50

C) Cost of Goods Sold500

Work in process Inventory500

D) Accounts Payable500

Work in Process Inventory500

• D
• C
• B
• A

9)In a process costing system, which account shows the overhead assigned to the department?

• cost of goods sold
• work in process inventory
• finished goods inventory
• raw material inventory