Question 1: Which of the following are examples of industries that use process-costing systems?
A. Pharmaceutical
B. Oil refining
C. Semiconductor Chips
D. All of the above
Question 2: Which of the following is true about the sales value at split off method and the NRV Method?
A. The net realizable value method allocates joint costs to joint products on the basis of the relative net realizable value (the final sales value minus the separable costs of production and marketing) of the total production of the joint products during the accounting period.
B. The sales value at split off method allocates joint costs to joint products on the basis of the relative total sales value at the split off point of the total production of these products during the accounting period.
C. Both A. and B.
D. Neither A. and B.
Question 3: Which of the following are two major methods to account for byproducts?
A. Sales value at split off method and net realizable value method.
B. Production method and net realizable value method.
C. Sales method and constant? Gross-margin percentage method.
D. Production method and sales method.
Question 4: Select the major advantage of the FIFO method for purposes of planning and control.
A. A major advantage of FIFO is its ease of use for process industries that produce a wide variety of similar products and in complex conditions.
B. A major advantage of FIFO is that managers can judge the performance in the current period independently from the performance in the preceding period.
C. A major advantage of FIFO is the relative computational simplicity and its reporting of a? More-representative average unit cost when input prices fluctuate markedly from month to month.
D. All of these are advantages of the FIFO method.
Question 5: Select the major advantage of the FIFO method for purposes of planning and control.
A. A major advantage of FIFO is its ease of use for process industries that produce a wide variety of similar products and in complex conditions.
B. A major advantage of FIFO is that managers can judge the performance in the current period independently from the performance in the preceding period.
C. A major advantage of FIFO is the relative computational simplicity and its reporting of a? more-representative average unit cost when input prices fluctuate markedly from month to month.
D. All of these are advantages of the FIFO method.
Question 6: Identify the main difference between journal entries in process costing and job costing.
A. The journal entries in process costing are posted to record the number of units as they are moved from one department to another. Journal entries in job costing are posted to record costs rather than number of units.
B. The Weighted-average method is used for the journal entries in process costing while the FIFO method is used for the journal entries in job costing.
C. There is often more than one Work-in-process account in process costing long dash-?-one for each process.
D. The journal entries in process costing are the same as those made in Job-costing systems.
Question 7: Transferred-in costs are those costs incurred in the preceding accounting period." Do you agree? Explain.
A. No Transferred-in costs or current period costs are costs incurred only while the product is being processed within the current department. As the costs are incurred in the current period, they are transferred in and assigned to the units.
B. No Transferred-in costs or previous department costs are costs incurred in a previous department that have been charged to a subsequent department. These costs may be costs incurred in that previous department during this accounting period or a preceding accounting period.
C. Yes Transferred-in costs or previous department costs are only costs incurred in a preceding accounting period. As units move from one accounting period to another, the related costs are transferred by monthly journal entries.
D. None of the above are correct Transferred-in costs have nothing to do with costs incurred during any accounting period.