Systems Design: Process Costing 4-1

Chapter 04 - Systems Design: Process Costing 4-1

Chapter 04

Systems Design: Process Costing

Multiple Choice Questions

1. (Appendix 4A) Which of the following statements referring to a production report is not

correct?

A.The quantity schedule deals with physical units, not whole units.

B.The total "Costs to be accounted for" must equal the total cost of the units completed and

transferred out, plus the cost of the ending work-in-process inventory.

C.The equivalent units in the ending work-in-process inventory will be different if the

weighted-average method is used than it will be if the FIFO method is used.

D.The total of the "Units to be accounted for" will equal the total of the "Units accounted for."

Bloom's Level: Understand Difficulty: Hard

Learning Objective: 2

Learning Objective: 3

Learning Objective: 4

Learning Objective: 6

Learning Objective: 7

Learning Objective: 8

2. Assume that there is no beginning work-in-process inventory, and the ending work-in-process inventory is 50% complete with respect to conversion costs. What would be

the number of equivalent units of production with respect to conversion costs under the

weighted-average method?

A.The same as the units completed.

B.The same as the units started during the period.

C.Less than the units completed.

D.Less than the units started during the period.

Bloom's Level: Understand

Difficulty: Hard

Learning Objective: 2

Chapter 04 - Systems Design: Process Costing 4-2

3. (Appendix 4A) All production costs have been steadily rising in the Donner Company for

several periods, and the company maintains large work-in-process inventories. What is the

Donner Company's cost per equivalent unit, as computed using the FIFO method?

A.The same as that computed under the weighted-average