chapter 3- process costing

Question 1

process cost systems

Answer 1

used to apply costs to similar products that are mass produced continuously

Question 2

similarities between job order and process cost systems

Answer 2

1. manufacturing cost elements
2. accumulation of the cost of materials, labor, and overhead.
3. the flow of costs

Question 3

differences between job order and process cost systems

Answer 3

1. The number of work in process accounts used.
2. Documents used to track costs.
3. The point at which costs are totaled.
4. Unit cost computations.

Question 4

unit cost calculation

Answer 4

total manufacturing costs for the period / units produces during the period

Question 5

equivalent units of production

weighted average method

Answer 5

units completed and transferred out + equivalent units of ending work in process

Question 6

conversion costs

Answer 6

the sum of labor costs and overhead costs

Question 7

equivalent units of production meterials

Answer 7

units completed and transferred out-materials+equivalent units of ending WIP - materials

Question 8

equivalent units of production conversion costs

Answer 8

units completed and transferred out-conversion costs + equivalent units of WIP- conversion costs

Question 9

steps to prepare production cost report

Answer 9

1. Compute the physical unit flow.
2. Compute the equivalent units of production.
3. Compute unit production costs.
4. Prepare a cost reconciliation schedule.

Question 10

physical units

Answer 10

The actual units to be accounted for during a period, irrespective of any work performed.
To keep track of these units, it is necessary to add the units started (or transferred) into production during the period to the units in process at the beginning of the period.

Question 11

unit production costs

Answer 11

When equivalent units of production are different for materials and conversion costs, three unit costs are computed: (1) materials, (2) conversion, and (3) total manufacturing.
to compute: total materials cost/ equivalent units

Question 12

Total manufacturing cost per unit

Answer 12

unit materials cost + unit conversion cost