Chap 9

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1. ... Process costing would be used by companies producing 6. B 20. The Nichols Company uses the weighted-average
the following items: bricks, bolts, method in its process costing system.
pharmaceutical items, natural gas, and electricity. The company recorded 29,500 equivalent units for
conversion costs for November in a
2. A 15. A process costing system:
particular department. There were 6,000 units in the
A. uses a separate Work in Process account for each
ending work in process inventory on
processing department.
November 30, 75% complete with respect to conversion
B. uses a single Work in Process account for the entire
costs. The November 1 work in
company.
process inventory consisted of 8,000 units, 50% complete
C. uses a separate Work in Process account for each type
with respect to conversion costs. A
of product produced.
total of 25,000 units were completed and transferred out
D. does not use a Work in Process account in any form.
of the department during the month.
3. A 19. The cost of beginning inventory under the weighted- The number of units started during November in the
average method is: department was:
A. added in with current period costs in determining costs A. 24,500 units
per equivalent unit for a given B. 23,000 units
period. C. 27,000 units
B. ignored in determining the costs per equivalent unit for D. 21,000 units
a given period.
7. C 16. A company should use process costing, rather than job
C. considered separately from costs incurred during the
order costing, if:
current period.
A. production is only partially completed during the
D. subtracted from current period costs in determining
accounting period.
costs per equivalent unit for a given
B. the product is manufactured in batches only as orders
period.
are received.
4. B In a process costing system, manufacturing overhead C. the product is composed of mass-produced
applied is usually recorded as a debit homogeneous units.
to: D. the product goes through several steps of production.
A. Finished goods.
8. D 18. Equivalent units for a process costing system using the
B. Work in process.
weighted-average method would
C. Manufacturing overhead.
be equal to:
D. Cost of goods sold.
A. units completed during the period and transferred out.
5. B 17. Which of the following characteristics applies to B. units started and completed during the period plus
process costing, but does not apply to job equivalent units in the ending work in
order costing? process inventory.
A. The need for averaging. C. units completed during the period less equivalent units
B. The use of equivalent units of production. in the beginning inventory, plus
C. Separate, identifiable jobs. equivalent units in the ending work in process inventory.
D. The use of predetermined overhead rates. D. units completed during the period plus equivalent units
in the ending work in process
inventory
9. D The Assembly Department started the month with 14,000 units in its beginning work in
process inventory. An additional 296,000 units were transferred in from the prior department
during the month to begin processing in the Assembly Department. There were 14,000 units
in the ending work in process inventory of the Assembly Department.
How many units were transferred to the next processing department during the month?
A. 293,000
B. 310,000
C. 324,000
D. 296,000
10. True 1. The following journal entry would be made in a processing costing system when units that
have been completed with respect to the work done in Processing Department Z are
transferred from Processing Department Z to Processing Department Y:
11. True 4. A process costing system would be best suited for production of a large quantity of a
homogeneous product.
12. True In process costing, costs are accumulated in processing departments, rather than by job.
13. True When computing the cost per equivalent unit, it is not necessary to consider the
percentage completion of the units in beginning inventory under the weighted-average
method.