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| 1 | |
When a FIFO (first in, first out) process costing is used, which of the following are assumed to be completed first in the current period? |
| | A) | Units started during the current period. |
| | B) | Units started during a previous period. |
| | C) | Units transferred out during the current period. |
| | D) | Units started and completed during the current period. |
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| 2 | |
Under a process costing system, the partially completed units that exist at the beginning or end of the accounting period in the work in process inventories are converted to equivalent units of production so that the work in process inventories can be valued. Equivalent units of production are equal to: |
| | A) | the number of whole units that could have been completed if all the work during the period had been used to produce whole units |
| | B) | the number of units completed in the production department during the period |
| | C) | the number of units worked on during the period |
| | D) | the number of partial units existing at the end of the period in the production department |
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| 3 | |
Normal spoilage is considered a product cost and is not expensed through the income statement as cost of goods sold until the good quality products are sold. Abnormal spoilage is: |
| | A) | considered a product cost and is not expensed in the income statement as cost of goods sold until the good quality products are sold |
| | B) | considered a product cost and is transferred to the work in process inventory account |
| | C) | considered a period cost and is expensed in the current period |
| | D) | considered a period cost and is transferred to the work in process inventory account as a balance day adjustment |
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| 4 | |
The four steps for process costing are: |
| | A) | analyse the physical flow of units, calculate the equivalent units, calculate the unit costs and analyse the total costs |
| | B) | analyse the total costs, analyse the physical flow of units, calculate the equivalent units and calculate the unit costs |
| | C) | analyse the physical flow of units, calculate the unit costs, calculate the equivalent units and analyse the total costs |
| | D) | analyse the physical flow of units, analyse the total costs, calculate the equivalent units and calculate the unit costs |
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| 5 | |
What is the key difference between the weighted average and FIFO (first in, first out) inventory valuation methods? |
| | A) | The way in which beginning work in process inventory is treated. |
| | B) | The way in which completed and transferred units are treated. |
| | C) | The way in which ending work in process inventory is treated. |
| | D) | The way in which current period costs are treated. |
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| 6 | |
The main reason why management accountants undertake process costing is to: |
| | A) | analyse the physical flow of production |
| | B) | determine the overapplied manufacturing overhead |
| | C) | determine the underapplied manufacturing overhead |
| | D) | calculate the manufacturing cost per unit |
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| 7 | |
King Company had 2000 units in work in process at the beginning of July. During July, 22 000 units were completed. On July 31, 3000 units remained in work in process. How many units were started during July? |
| | A) | 22 000. |
| | B) | 21 600. |
| | C) | 23 000. |
| | D) | 24 000. |
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| 8 | |
King Company had 5000 units in work in process at the beginning of September. During September, 22 000 units were completed and transferred out. On September 30, 3000 units remained in work in process. How many units were started and completed during September? |
| | A) | 20 000. |
| | B) | 17 000. |
| | C) | 25 000. |
| | D) | 22 000. |
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| 9 | |
When computing equivalent units of production, the method that combines the partially completed units in the beginning inventory with current period production is the: |
| | A) | first in, first out (FIFO) inventory valuation method |
| | B) | last in, first out (LIFO) inventory valuation method |
| | C) | standard costing inventory valuation method |
| | D) | weighted average inventory valuation method |
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| 10 | |
Equivalent unit calculations for standard process costing are the same as: |
| | A) | equivalent unit calculations for weighted average process costing |
| | B) | equivalent unit calculations for last in, first out (LIFO) process costing |
| | C) | equivalent unit calculations for first in, first out (FIFO) process costing |
| | D) | equivalent unit calculations for specific identification process costing |
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