) Process costing is typically used for businesses that make unique goods in relatively
small amounts.
Answer: FALSE
Diff: 1
LO: 5-1
EOC:
... [Show More] S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
2) Cost for direct materials, direct labor and manufacturing overhead are assigned to each
job.
Answer: FALSE
Diff: 1
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
3) A separate work in process inventory account is maintained for each process.
Answer: TRUE
Diff: 1
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
4) Unique or custom-made goods use a process costing system.
Answer: FALSE
Diff: 1
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
5) Both process costing and job costing assign costs to units as they proceed through the
process.
Answer: TRUE
Diff: 2
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing. Describe a job order cost system and calculate the predetermined
overhead rate and allocate indirect costs
ACCT2302 Managerial Accounting 3rd Edition Braun/Tiez
Chapter 5 With Updated Answers 2023-2024 Version
6) Each manufacturing process will have a WIP inventory account.
Answer: TRUE
Diff: 1
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
7) In a job cost system, all costs flow to a particular job.
Answer: TRUE
Diff: 1
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Describe a job order cost system and calculate the predetermined
overhead rate and allocate indirect costs
8) Prime costs include direct labor and direct materials.
Answer: TRUE
Diff: 1
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
9) Conversion costs are the sum of direct labor and direct materials.
Answer: FALSE
Diff: 2
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
10) Indirect labor would not be a component of conversion costs.
Answer: FALSE
Diff: 1
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
ACCT2302 Managerial Accounting 3rd Edition Braun/Tiez
Chapter 5 With Updated Answers 2023-2024 Version
11) In process costing, the costs flow from Raw Materials Inventory, to Work in Process
Inventory, to Finished Goods Inventory.
Answer: TRUE
Diff: 1
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
12) To simplify the accounting, the journal entry to record the transfer of costs from one
WIP account to the next WIP account is generally made once a month to reflect all physical
transfers that occurred during the month.
Answer: TRUE
Diff: 2
LO: 5-1
EOC: E5-23
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
13) In process costing, the manufacturing costs assigned to the product must always follow
the physical movement of the product.
Answer: TRUE
Diff: 2
LO: 5-1
EOC: E5-23
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
14) The costs moved from one processing department to the next processing department
are called "transported-out" costs in the first department and "transported-in" costs in the
next department.
Answer: FALSE
Diff: 2
LO: 5-1
EOC: E5-23
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
15) How are manufacturing costs treated in process costing?
A) The manufacturing costs are added only when the goods are in finished inventory.
B) The manufacturing costs are added only when the goods are sold.
C) The manufacturing costs always follow the physical movement of the product.
D) None of the above.
Answer: C
Diff: 2
LO: 5-1
EOC: E5-23
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
16) When units are moved from one processing department to the next, the cost associated
ACCT2302 Managerial Accounting 3rd Edition Braun/Tiez
Chapter 5 With Updated Answers 2023-2024 Version
with those units must also be moved from one WIP account to the next. What are these
costs called?
A) Transported costs
B) Transmitted costs
C) Transferred costs
D) Conveyed costs
Answer: C
Diff: 2
LO: 5-1
EOC: E5-23
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
17) Baxter Company produces children's wiffle ball sets using a three-step sequential
process that includes molding, coloring and finishing. When the sets are completely
finished, out of which account should the cost be transferred?
A) Finished goods inventory
B) WIP inventory-coloring
C) WIP inventory-finishing
D) WIP inventory-molding
Answer: C
Diff: 2
LO: 5-1
EOC: E5-23A
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
18) Baxter Company produces wiffle ball sets using a three-step sequential process that
includes molding, coloring and finishing. At what stage would the sets be allocated
manufacturing overhead?
A) When the frisbees are in WIP inventory-molding
B) When the frisbees are in WIP inventory-finishing
C) When the frisbees are in WIP inventory-coloring
D) All of the above
Answer: D
Diff: 2
LO: 5-1
EOC: E5-23A
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
19) The two basic types of product costing systems are
A) department and plant.
B) FIFO and weighted-average.
C) variable and process.
D) job and process.
Answer: D
Diff: 1
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
ACCT2302 Managerial Accounting 3rd Edition Braun/Tiez
Chapter 5 With Updated Answers 2023-2024 Version
process costing. Describe a job order cost system and calculate the predetermined
overhead rate and allocate indirect costs
20) Which of the following product costing systems is normally used to assign costs to
goods that are mass produced?
A) Fixed costing
B) Job costing
C) Process costing
D) LIFO costing
Answer: C
Diff: 1
LO: 5-1
EOC: S5-1
AACSB: Reflective Thinking
Learning Outcome: Discuss process costing systems and calculate product cost using
process costing
21) Process costing is most likely used in which of the following industries?
A) Chemicals
B) Aircraft
C) Construction
D) Printing
Answer: A [Show Less]