Test Bank for Cost Management:
A Strategic Emphasis
Firms producing homogeneous products that pass through a series of departments generally use
______ costing. - ANSWERSprocess
Equivalent units should ______ be calculated separately for direct materials, direct labor, and
factory overhead. - ANSWERSsometimes
The category of transferred in costs appears in ______. - ANSWERSwork-in-process for all
departments except the first
The key document in a typical process costing system is the ______ ______ report. - ANSWERSBlank
1: production
Blank 2: cost
Process costing methods include ______. - ANSWERSFIFO
weighted-average
Firms that use process costing ______. - ANSWERSengage in the continuous production of a few
similar products
Equivalent units are the number of same or similar complete units that ______. - ANSWERScould
have been produced given the work actually performed
Which of the following statements regarding process costing are true? - ANSWERSCompleted goods
are transferred to Finished Goods inventory.
A separate work-in-process account is maintained for each production department.
The production cost report summarizes ______. - ANSWERSphysical and equivalent units of a
department
cost assigned to completed units
costs incurred during the period
,The process costing method(s) that includes both prior period and current period costs when
calculating unit cost is (are) ______. - ANSWERSweighted-average only
In process costing, unit product cost is calculated by dividing process costs in each department by
the number of ______. - ANSWERSequivalent units produced
A juice manufacturer has 50,000 gallons of juice in process at the beginning of the month. By
month's end 25,000 gallons were complete, 20,000 gallons were 60% complete and 5,000 units were
40% complete. Equivalent units equals ______ gallons. - ANSWERS39,000
Reason:
25,000 + 20,000 × 60% + 5,000 × 40% = 39,000 gallons
Units to account for equals the sum of the units in ______. - ANSWERSbeginning inventory plus the
number of units started during the period
A company had 2,000 units of work-in-process beginning inventory that were 50% complete for
materials and conversion costs. Ending work-in-process units are 100% complete for materials and
40% complete for conversion. During the period 30,000 units were started and 27,000 were
completed. The number of equivalent units for materials using the FIFO method is ______. -
ANSWERS31,000
Reason:
Ending WIP = 30,000 + 2,000 - 27,000 = 5,000
EU(materials) = 27,000 + 100% × 5,000 - 2,000 × 50% = 31,000
The process costing method(s) that includes only current period costs when calculating unit cost is
(are) ______. - ANSWERSonly FIFO
A firm may choose the FIFO method over the weighted-average method because FIFO ______. -
ANSWERSprovides improved performance measurement when costs are changing significantly from
period to period
True or false: Transferred-in costs are similar to direct materials introduced at the beginning of
production. - ANSWERST
, Given 5,000 units in beginning work-in-process, 3,000 units in ending work-in-process, 25,000 units
started and 27,000 completed units, the number of units to account for is ______. - ANSWERS30,000
Reason:
5,000 + 25,000 = 30,000
To calculate FIFO equivalent units, take the weighted-average equivalent units and ______ work-in-
process equivalent units. - ANSWERSsubtract beginning
The choice between the FIFO and weighted-average methods is generally not very important when
______. - ANSWERSthere is relatively little or no work-in-process inventory
Which of the following statements is false?
Multiple choice question.
The equivalent units for transferred-in costs is always equal to the physical units transferred in in the
weighted-average method.
Transferred in costs are included in both FIFO and weighted average calculations.
Transferred-in costs are similar to conversion costs.
Transferred-in costs are always 100% complete. - ANSWERSTransferred-in costs are similar to
conversion costs.
Given 5,000 units in beginning work-in-process, 20,000 completed units, and 25,000 units started in
a period, then the number of units in ending work-in-process is ______. - ANSWERS10,000
Reason:
5,000 + 25,000 - 20,000 = 10,000
The finishing department is the second processing department for a company. At the beginning of
the month there were 5,000 units in Beginning Inventory that had been transferred in. During the
month 12,000 more units were transferred in and a total of 15,000 were completed. Calculate the
equivalent units for transferred in costs using the weighted average method. - ANSWERS17,000
Reason:
Ending WIP inventory= 5,000 + 12,000 - 15,000 = 2,000 units. 15,000 completed + 2,000 WIP =
17,000
The finishing department is the second processing department for a company. At the beginning of
the month there were 5,000 units in Beginning Inventory that had been transferred in. During the
A Strategic Emphasis
Firms producing homogeneous products that pass through a series of departments generally use
______ costing. - ANSWERSprocess
Equivalent units should ______ be calculated separately for direct materials, direct labor, and
factory overhead. - ANSWERSsometimes
The category of transferred in costs appears in ______. - ANSWERSwork-in-process for all
departments except the first
The key document in a typical process costing system is the ______ ______ report. - ANSWERSBlank
1: production
Blank 2: cost
Process costing methods include ______. - ANSWERSFIFO
weighted-average
Firms that use process costing ______. - ANSWERSengage in the continuous production of a few
similar products
Equivalent units are the number of same or similar complete units that ______. - ANSWERScould
have been produced given the work actually performed
Which of the following statements regarding process costing are true? - ANSWERSCompleted goods
are transferred to Finished Goods inventory.
A separate work-in-process account is maintained for each production department.
The production cost report summarizes ______. - ANSWERSphysical and equivalent units of a
department
cost assigned to completed units
costs incurred during the period
,The process costing method(s) that includes both prior period and current period costs when
calculating unit cost is (are) ______. - ANSWERSweighted-average only
In process costing, unit product cost is calculated by dividing process costs in each department by
the number of ______. - ANSWERSequivalent units produced
A juice manufacturer has 50,000 gallons of juice in process at the beginning of the month. By
month's end 25,000 gallons were complete, 20,000 gallons were 60% complete and 5,000 units were
40% complete. Equivalent units equals ______ gallons. - ANSWERS39,000
Reason:
25,000 + 20,000 × 60% + 5,000 × 40% = 39,000 gallons
Units to account for equals the sum of the units in ______. - ANSWERSbeginning inventory plus the
number of units started during the period
A company had 2,000 units of work-in-process beginning inventory that were 50% complete for
materials and conversion costs. Ending work-in-process units are 100% complete for materials and
40% complete for conversion. During the period 30,000 units were started and 27,000 were
completed. The number of equivalent units for materials using the FIFO method is ______. -
ANSWERS31,000
Reason:
Ending WIP = 30,000 + 2,000 - 27,000 = 5,000
EU(materials) = 27,000 + 100% × 5,000 - 2,000 × 50% = 31,000
The process costing method(s) that includes only current period costs when calculating unit cost is
(are) ______. - ANSWERSonly FIFO
A firm may choose the FIFO method over the weighted-average method because FIFO ______. -
ANSWERSprovides improved performance measurement when costs are changing significantly from
period to period
True or false: Transferred-in costs are similar to direct materials introduced at the beginning of
production. - ANSWERST
, Given 5,000 units in beginning work-in-process, 3,000 units in ending work-in-process, 25,000 units
started and 27,000 completed units, the number of units to account for is ______. - ANSWERS30,000
Reason:
5,000 + 25,000 = 30,000
To calculate FIFO equivalent units, take the weighted-average equivalent units and ______ work-in-
process equivalent units. - ANSWERSsubtract beginning
The choice between the FIFO and weighted-average methods is generally not very important when
______. - ANSWERSthere is relatively little or no work-in-process inventory
Which of the following statements is false?
Multiple choice question.
The equivalent units for transferred-in costs is always equal to the physical units transferred in in the
weighted-average method.
Transferred in costs are included in both FIFO and weighted average calculations.
Transferred-in costs are similar to conversion costs.
Transferred-in costs are always 100% complete. - ANSWERSTransferred-in costs are similar to
conversion costs.
Given 5,000 units in beginning work-in-process, 20,000 completed units, and 25,000 units started in
a period, then the number of units in ending work-in-process is ______. - ANSWERS10,000
Reason:
5,000 + 25,000 - 20,000 = 10,000
The finishing department is the second processing department for a company. At the beginning of
the month there were 5,000 units in Beginning Inventory that had been transferred in. During the
month 12,000 more units were transferred in and a total of 15,000 were completed. Calculate the
equivalent units for transferred in costs using the weighted average method. - ANSWERS17,000
Reason:
Ending WIP inventory= 5,000 + 12,000 - 15,000 = 2,000 units. 15,000 completed + 2,000 WIP =
17,000
The finishing department is the second processing department for a company. At the beginning of
the month there were 5,000 units in Beginning Inventory that had been transferred in. During the
