Description
Test Bank For Managerial Accounting Stacey Whitecotton 4th Edition
Managerial Accounting, 4e (Whitecotton)
Chapter 3 Process Costing
1) Process costing is used to calculate the cost of homogenous goods or services.
Answer: TRUE
Explanation: Process costing is used by companies that produce homogeneous products or services using a series of standardized processes.
Difficulty: 1 Easy
Topic: Basic Concepts in Process Costing
Learning Objective: 03-01 Describe the key features of a process costing system.
Bloom’s: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) A major difference between job order costing and process costing is the treatment of nonmanufacturing costs.
Answer: FALSE
Explanation: In both job order costing and process costing, nonmanufacturing costs are expensed in the period in which they are incurred.
Difficulty: 1 Easy
Topic: Flow of Costs in Process Costing
Learning Objective: 03-01 Describe the key features of a process costing system.
Bloom’s: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
3) A separate Work in Process Inventory account is used in process costing for each major production process.
Answer: TRUE
Explanation: In process costing, there will be a separate Work in Process Inventory account for each of the major processes.
Difficulty: 1 Easy
Topic: Flow of Costs in Process Costing
Learning Objective: 03-01 Describe the key features of a process costing system.
Bloom’s: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) Process costing often combines direct materials and direct labor into a single category called conversion costs.
Answer: FALSE
Explanation: In process costing, direct labor and manufacturing overhead (not direct materials) are often combined into a single category called conversion costs.
Difficulty: 1 Easy
Topic: Flow of Costs in Process Costing
Learning Objective: 03-01 Describe the key features of a process costing system.
Bloom’s: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) The process costing production report is used to determine how much manufacturing cost to transfer out of Finished Goods Inventory and into Cost of Goods Sold.
Answer: FALSE
Explanation: The process costing report is used to determine how much manufacturing cost to transfer out of Work in Process Inventory (not finished goods) and into the next processing department (or Finished Goods Inventory if it is the last production process).
Difficulty: 1 Easy
Topic: Process Costing Production Report
Learning Objective: 03-01 Describe the key features of a process costing system.
Bloom’s: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
6) The process costing production report can be prepared using either the weighted-average method or the last-in, first-out (LIFO) method.
Answer: FALSE
Explanation: The process costing production report can be prepared using either the weighted-average method or the first-in, first-out (FIFO) method (not the LIFO method).
Difficulty: 1 Easy
Topic: Process Costing Production Report
Learning Objective: 03-01 Describe the key features of a process costing system.
Bloom’s: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
7) The key difference between a process costing production report prepared using one of the two acceptable methods is how they deal with any units and costs that are in ending Work in Process Inventory.
Answer: FALSE
Explanation: The key difference between a process costing production report prepared using one of the two acceptable methods is how they deal with any units and costs that are in the beginning Work in Process Inventory.
Difficulty: 2 Medium
Topic: Process Costing Production Report
Learning Objective: 03-01 Describe the key features of a process costing system.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Reviews
There are no reviews yet.