Question

Under what situation are ‘units started’ equal to ‘units completed’ in production?

	a.	when physical units equals equivalent units.
	b.	when beginning Work in Process equals ending Work in Process.
	c.	when beginning inventory equals zero.
	d.	when beginning Work in Process equals zero and units started in production equals the total of ending Work in Process and units transferred out.

A production cost report shows units and costs. Which one of the following sections is not shown under costs?

	a.	Units transferred out.
	b.	Costs to be accounted for.
	c.	Costs started into production.
	d.	Unit costs.

Which statement is true concerning process cost systems?

	a.	Product costs are determined when the products are sold.
	b.	The cost of each unit of product is determined after each unit is produced.
	c.	Each Work in Process account represents the cost of a different product.
	d.	Product costs are summarized on production cost reports.

When computing the predetermined manufacturing overhead rate, which amount below is most likely used in the numerator?

	a.	applied manufacturing overhead costs
	b.	actual manufacturing overhead costs
	c.	estimated manufacturing overhead costs
	d.	direct labour hours

he denominator in a predetermined overhead rate is usually

	a.	estimated overhead costs.
	b.	estimated activity level.
	c.	actual activity level.
	d.	actual overhead costs.

At what point in time is the predetermined overhead rate calculated?

	a.	Once actual overhead costs are incurred.
	b.	At the end of the year in which the job is in production.
	c.	At the time each job is completed.
	d.	At the beginning of the year.

Which one of the following is a common activity base used to calculate the predetermined overhead rate?

	a.	Number of jobs completed.
	b.	Indirect labour costs.
	c.	Number of months to complete jobs.
	d.	Direct labour dollars.

Which one of the following is a common activity base used to calculate the predetermined overhead rate?

	a.	Number of jobs completed.
	b.	Indirect labour costs.
	c.	Number of months to complete jobs.
	d.	Direct labour dollars.

Which transaction is used to recognize the acquisition of raw materials on account?

	a.	debit to Accounts Payable and credit to Raw Materials Inventory
	b.	debit to Raw Materials Inventory and credit to Accounts Payable
	c.	debit to Work in Process Inventory and credit to Accounts Payable
	d.	debit to Manufacturing Overhead, debit to Raw Materials Inventory, and credit to Accounts Payable

Answer 1

1. The correct answer is option d.

Physical plow of units is determined as

Units in Beginning WIP + Units started = Total Units

Units completed + units in ending WIP = Total units

2.The correct answer is option c

Costs started into the prodiction

3.The correct answer is option d

Product Cost report are summarised on production cost reports.

4.The correct answer is option c.

Estimated manufacturing overhead cost

5.The correct answer is option b.

Estimated activity level.

6.The correct answer is option c

At the time each job is completed.

7.The correct answer is option d

Direct labor dollars

8.The correct answer is option b.

Debit to Raw material inventory and credit to accounts payable

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