Love

CHAPTER 14: PROCESS COSTING AND THE COST ACCOUNTING CYCLE

Multiple Choice

c 1. ABC Company made the following journal entry.

Work in Process Inventory $200,000

Direct Labor $188,000

Direct Labor Rate Variance 12,000

From this entry we can tell that ABC uses

a. job-order costing.

b. process costing.

c. standard costing.

d. normal costing.

d 2. CDE Company made the following journal entry.

Finished Goods Inventory $250,000

Work in Process Inventory $250,000

From this entry we can tell that CDE uses

a. job-order costing.

b. process costing.

c. standard costing.

d. any of the above.

b 3. Which of the following is NOT relevant in determining weighted-average unit cost in process costing?

a. Cost of beginning inventory.

b. Equivalent unit production in beginning inventory.

c. Equivalent unit production in ending inventory.

d. Units completed.

d 4. Standard process costing does NOT require information about

a. units completed during the period.

b. equivalent unit production in ending inventory.

c. standard cost per unit.

d. actual unit cost for the period.

d 5. A company that uses job-order costing

a. cannot use standard costs.

b. accumulates costs by department.

c. probably makes a single product.

d. does not have to calculate equivalent production.

c 6. Which company is most likely to use job-order costing?

a. A brewery.

b. An automobile manufacturer.

c. A bridge builder.

d. A button manufacturer.

c 7. Which company is most likely to use process costing?

a. A manufacturer of nuclear reactors.

b. A construction contractor.

c. A cannery.

d. A textbook publisher.

a 8. Fixed production costs are...