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Process Cost Systems

Please help me with the True/False study guide for test review.

1. The cost of production report reports the cost of the goods sold.
a. True
b. False

2. In a process costing system, a separate work in process inventory account is maintained for each customer's job.
a. True
b. False

3. Process cost systems use job order cost cards to accumulate cost data.
a. True
b. False

4. When a process cost accounting system records the purchase of materials, the Materials account is credited.
a. True
b. False

5. The closer a company moves towards Just in Time production, the differences in unit costs between average costing and FIFO will be reduced.
a. True
b. False

6. Equivalent units of production are always the same as the total number of physical units finished during the period.
a. True
b. False

7. If the principal products of a manufacturing process are identical, a process cost system is more appropriate than a job order cost system.
a. True
b. False

8.The entry to transfer goods in process from Department X to Department Y includes a debit to Work in Process-Department X.
a. True
b. False

9. Gilbert Corporation had 25,000 finished units and 8,000 units were 35% complete. The equivalent units totaled 30,200.
a. True
b. False

10. If the costs for direct materials, direct labor, and factory overhead were $60,000, $35,000, and $25,000, respectively, for 20,000 equivalent units of production, the conversion cost per equivalent unit was $6.
a. True
b. False

Solution Preview

1. The cost of production report reports the cost of the goods sold.
b. False
The cost of production report never reports COGS.

2. In a process costing system, a separate work in process inventory account is maintained for each customer's job.
b. False
A separate work in process account is maintained for each process, not for each job.

3. Process cost systems use job order cost cards to accumulate cost data.
b. False
Job order cost cards are used in job order costing, not process costing.

4. When a process cost accounting system records the ...

Solution Summary

This solution provides the correct answers with explanations to the process cost systems questions listed.

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