1、cost acct test bank chapter 17Cost Accounting, 14e (Horngren/Datar/Rajan)Chapter 17 Process CostingObjective 17.11) Costing systems that are used for the costing of like or similar units of products in mass production are called: A) inventory-costing systems B) job-costing systems C) process-costing
2、 systems D) weighted-average costing systems Answer: CDiff: 1Terms: process-costing systemObjective: 1AACSB: Reflective thinking2) Which of the following manufactured products would NOT use process costing? A) 747 jet aircraft B) 46-inch television sets C) Construction of a commercial office buildin
3、gD) Both A and C are correct. Answer: DDiff: 2Terms: process-costing systemObjective: 1AACSB: Reflective thinking3) Process costing should be used to assign costs to products when the: A) units produced are similar B) units produced are dissimilar C) calculation of unit costs requires the averaging
4、of unit costs over all units produced D) Either A or C are correct. Answer: DDiff: 2Terms: process-costing systemObjective: 1AACSB: Reflective thinking4) Which one of the following statements is true? A) In a job-costing system, individual jobs use different quantities of production resources. B) In
5、 a process-costing system each unit uses approximately the same amount of resources. C) An averaging process is used to calculate unit costs in a job-costing system. D) Both A and B are correct. Answer: DDiff: 2Terms: process-costing systemObjective: 1AACSB: Reflective thinking5) Conversion costs: A
6、) include all the factors of production B) include direct labor and overheadC) in process costing are usually considered to be added evenly throughout the production process D) Both B and C are correct. Answer: DDiff: 2Terms: process-costing systemObjective: 1AACSB: Reflective thinking6) An example
7、of a business which would have no beginning or ending inventory but which could use process costing to compute unit costs would be a: A) clothing manufacturer B) corporation whose sole business activity is processing the customer deposits of several banks C) manufacturer of custom houses D) manufact
8、urer of large TVs Answer: BDiff: 2Terms: process-costing systemObjective: 1AACSB: Reflective thinking7) Which of the following statement(s) concerning conversion costs is correct? A) Estimating the degree of completion of direct materials in a partially completed unit is usually easier to calculate
9、than estimating the degree of completion for conversion costs. B) The calculation of equivalent units is relatively easy for the textile industry. C) Estimates are usually not considered acceptable. D) Both B and C are correct. Answer: ADiff: 2Terms: process-costing system, equivalent unitsObjective
10、: 1AACSB: Reflective thinking8) Examples of industries that would use process costing include the soft-drink bottling and oil industry. Answer: TRUEDiff: 1Terms: process-costing systemObjective: 1AACSB: Reflective thinking9) The principal difference between process costing and job costing is that in
11、 job costing an averaging process is used to compute the unit costs of products or services. Answer: FALSEExplanation: The averaging process is used to calculate unit costs in process costing.Diff: 2Terms: process-costing systemObjective: 1AACSB: Reflective thinking10) Process-costing systems separa
12、te costs into cost categories according to the timing of when costs are introduced into the process. Answer: TRUEDiff: 2Terms: process-costing systemObjective: 1AACSB: Reflective thinking11) Estimating the degree of completion for the calculation of equivalent units is usually easier for conversion
13、costs than it is for direct materials. Answer: FALSEExplanation: Estimating the degree of completion is easier for the calculation of direct materials since direct materials can be measured more easily than conversion costs.Diff: 2Terms: equivalent unitsObjective: 1AACSB: Reflective thinking12) Job-
14、order costing would be most likely used by a firm that produces homogeneous products.Answer: FALSEExplanation: Process costing would be most likely used by a firm that produces homogeneous products.Diff: 1Terms: process costingObjective: 1AACSB: Reflective thinking13) When identical or similar units
15、 of products or services are mass produced, job-costing is used to calculate an average production cost for all units produced.Answer: FALSEExplanation: When identical or similar units of products or services are mass produced, process costing is used to calculate an average production cost for all
16、units produced.Diff: 1Terms: process costingObjective: 1AACSB: Reflective thinking14) There are basically two distinct methods of calculating product costs. Required:Compare and contrast the two methods. Answer: In job costing the job or product is a distinctly identifiable product or service. Each
17、job requires (or can require) vastly different amounts of input. Job costing is usually associated with products that are unique or heterogeneous. Thus, each job requires different amounts of input, and they can require vastly different amount of costs to finish. Job-costed products tend to be high
18、cost per unit. Thus the costs of each (unique) job are important for planning, pricing, and profitability. In process costing, the jobs or products are similar (or homogeneous). Each job usually requires the same inputs, and results in approximately the same costs per unit. The cost of a product or
19、service is obtained by assigning total costs to many identical or similar units. We assume each unit receives the same amount of direct material costs, direct manufacturing labor costs, and indirect manufacturing costs. Unit costs are then computed by dividing total costs by the number of units. The
20、 principal difference between process costing and job costing is the extent of averaging used to compute unit costs. As noted above in job costing, individual jobs use different quantities of production resources; whereas in process costing, we assume that each job uses approximately the same amount
21、 of resources. Diff: 2Terms: process-costing systemObjective: 1AACSB: Reflective thinking15) Why do we need to accumulate and calculate unit costs in process costing (and also job costing)? Answer: We need to accumulate unit costs to:1. Budget (planning)2. Price3. Account for the costs 1. Budgeting
22、To operate a successful business, we should prepare budgets, review the results, and make decisions as to how well our business is doing. Our business has formulated plans for the future. The resources we need for the future (materials, conversion costs, facilities, etc.) will depend on our estimate
23、 of the resources we need to accomplish these goals. An important part of these estimates is the unit costs of the products we plan to produce. These unit costs will tell us how many dollars we must acquire to accomplish our plans.2. Price In order to be a profitable business, we must sell our produ
24、ct at a price in excess of what it costs us to produce the product. Essential for the pricing decision is the cost per unit. We will also learn whether we can sell a product at a profit.3. Accounting During the course of the accounting period, we will be accumulating costs. At the end of the account
25、ing period, we must allocate this pool of costs between the units that were transferred out and the goods in ending inventory. Unit costs are essential for this purpose. Diff: 1Terms: process-costing systemObjective: 1AACSB: Reflective thinking16) The president of the Gulf Coast Refining Corporation
26、 wants to know why his golfing partner, who is the chief financial officer of a large construction company, calculates his costs by the job, but his own corporation calculates costs by large units rather than by individual barrel of oil. Answer: Oil refineries use process costing to calculate their
27、costs per barrel of oil. Each barrel of oil is essentially the same. Thus, costs are accumulated for all the oil processed during a given time period, and the total costs are divided by the barrels of oil produced. An average cost is calculated. Since the costs to actually produce the oil are essent
28、ially the same, accuracy is not lost by this process. The construction company calculates costs by each job, since each job can require substantially different amounts of the various inputs. Thus, the cost of each job could be radically different from the other jobs. Diff: 1Terms: process-costing sy
29、stemObjective: 1AACSB: Multiculturalism and diversity17) Describe the differences between process costing and job costing. Discuss some typical products which would be more likely to use process costing as compared to some which would be more likely to use job costing.Answer: When products are uniqu
30、e, job costing is a more appropriate method to use in collecting costs and making decisions regarding price levels,. In a job-costing system, individual jobs require differing levels of resources. Each job is treated separately and the resources used to complete the job have to be calculated separat
31、ely. Construction jobs are most likely to use job costing because of their unique specifications.In a process-costing system, the units produced as output are very similar to one another. As a result, the means by which the raw material is converted to a finished product is common among all of the p
32、roducts. This allows the conversion costs to be summed up and divided by the total number of units for an accurate conversion cost on a unit by unit basis. Some typical types of products which are likely to use process costing are oil refineries, ice cream, various food preparation industries, etc. This is because the raw material is processed in a similar manner for all of the units produced.D
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