Process Cost Systems

The two categories of cost comprising conversion costs are: a. Direct labor and factory overhead. b. Direct labor and indirect labor. c. Direct labor and direct materials. d. Factory overhead and direct materials.

If a company uses a process costing system to account for the costs in its four production departments, how many Work-in-Process will it use? a. 4 b. 1 c. 3 d. 2

Which of the following is NOT a way in which process and job order cost systems are similar? a. Both use job order cost cards b. Both allocate product cost to units produced c. Both accumulate product costs--direct materials, direct labor, and factory overhead d. Both maintain perpetual inventories

Check My Work In a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following entries? a. Debit Finished Goods; credit Work in Process--Dept. B. b. Debit Work in Process--Dept. B; credit Work in Process--Dept. A. c. Debit Work in Process--Dept. B; credit Cost of Goods Sold--Dept. A. d. Debit Work in Process--Dept. B; credit Finished Goods--Dept. A.

The cost system best suited to industries that manufacture a large number of identical units of commodities on a continuous basis is: a. First-in, first-out. b. Departmental. c. Process. d. Job order.

The four steps necessary to determine the cost of goods completed and the ending inventory valuation in a process cost system are: allocate costs to transferred and partially completed units determine the units to be assigned costs determine the cost per equivalent unit calculate equivalent units of production The correct ordering of the steps is: a. 2, 4, 3, 1 b. 4, 2, 3, 1 c. 2, 3, 4, 1 d. 2, 3, 1, 4

In process cost accounting, the costs of direct materials and direct labor are charged directly to: a. Processing departments. b. Customer accounts receivable. c. Service departments. d. Job orders.

For which of the following businesses would a process cost system be appropriate? a. Specialty printer b. Auto repair service c. Custom furniture manufacturer d. Paint manufacturer