The movement of $300 of a product from the mixing process to the baking process in a process costing system is reflected

by which of the following journal entries?

a.

1 b.

c.

d. No journal entry is needed

status: correct (1.0)
correct: b
your answer: b
feedback: Correct.

In a process costing system materials are assigned to each:

a. work-in-process department.

2 b. job cost sheet.

c. raw materials inventory until sold.

d. batch of products being produced.

status: correct (1.0)
correct: a
your answer: a
feedback: Correct. In a process costing system materials are assigned to each work-in-process department.

The Arno Company uses the FIFO method in its process costing system. The equivalent units of production for March for
conversion totaled 37,500 units. The beginning inventory in March totaled 15,000 units, 60% complete with respect to
conversion. The ending inventory in March consisted of 10,000 units, 75% complete with respect to conversion. The
number of units started during the month was:

a. 41,500 units.
3
b. 34,000 units.

c. 25,000 units.

d. 72,500 units.
status: correct (1.0)
correct: b
your answer: b
feedback: Correct. Transferred out = 37,500 + .6(15,000) - .75(10,000) = 39,000. Units accounted for = 10,000 + 39,000 =
49,000. Units started = 49,000 - 15,000 = 34,000.

Which of the following correctly states a difference between job order and process cost systems?

The key document is the job order cost sheet in the job order cost system and the department production cost
a. report in the process cost system.
 An operational process system is characterized by a small number of homogeneous products passing through
a series of processes, where each process is responsible for one or more operations that bring a product
closer to completion.
1
True

False
status: correct (1.0)
correct: false
your answer: false
feedback: Correct. A process system is characterized by a large number of homogeneous units passing through a series of
processes, where each process is responsible for one or more operations that bring a product closer to completion.

In a process costing system, there is a separate Work-in-Process account for each process.

2 True

False
status: correct (1.0)
correct: true
your answer: true
feedback: Correct.

Service firms cannot use a process costing approach because services are never homogeneous or repetitive.

3 True

False
status: correct (1.0)
correct: false
your answer: false
feedback: Correct. Some services are repetitive and homogeneous and may use a process costing approach.

In order to equitably allocate costs in a process costing system, dissimilar products are restated in terms of
equivalent units by weighting the number of units produced by their market values.
4
True

False
status: correct (1.0)
correct: false
your answer: false
feedback: Correct. The number of units produced is weighted by the percentage completion.

The units started and completed represent the number of complete units that is equal, in terms of production
inputs, to a given number of partially completed units.
5
True

False
status: correct (1.0)
correct: false
your answer: false
feedback: Correct. This is the definition of equivalent units.

6 Under the weighted average method, the equivalent units in the production report relate only to work done
 during the current period.

True

False
status: correct (1.0)
correct: false
your answer: false
feedback: Correct. The weighted average equivalent units do not keep the work between the periods separate. It combines
the work by weighting it. The FIFO equivalent units represent the work of the current period.

There is no difference in the unit costs computed under the weighted average and FIFO methods of process
costing if there are no beginning work-in-process inventories.
7
True

False
status: correct (1.0)
correct: true
your answer: true
feedback: Correct.

In a process costing system, the costs of one processing department become the transferred-in costs of the
next processing department.
8
True

False
status: correct (1.0)
correct: true
your answer: true
feedback: Correct.

The weighted average method merges prior-period work and cost with current-period work and costs.

9 True

False
status: correct (1.0)
correct: true
your answer: true
feedback: Correct.

Products of different batches consume differing rates of conversion resources as they pass through an
operation.
10
True

False
status: correct (1.0)
correct: false
your answer: false
feedback: Correct. Operations consume the same rates of conversion resources no matter which products pass through the
operation.