Question

Under process costing, the manager for Process #4 (in a multi-process production operation) cannot control the amount of Transferred-In Costs assigned to him/her from earlier processes, but it still held responsible for those costs, and they will be part of the Cost of Production Report for Process #4.

A) True

B) False

When a job has been completed, all of the costs assigned on the job’s job cost sheet are moved to the Finished Goods Inventory account.

A) True

B) False

In computing product unit costs in a job order costing system, the total manufacturing costs assigned to each job are divided by the number of units produced for that job.
A) True

B) False

In a shoe factory, the cost of janitorial services would be an indirect cost of the Custodial Services department but would be a direct cost of the Shoe Production Department for cost allocation purposes.

A) True

B) False

Answer 1

True, under process costing, the manager for process#4 has no control over the transferred-in costs from earlier processes but still responsible for those costs and they will form part of the cost of production report for process #4.

True, because one the completion of job, the following entry is passed to transfer all the costs assigned to such job-

Finished goods inventory

Work-in-progress inventory

True, because the formula for calculating product unit costs in a job order costing system is given by-

Total manufacturing costs assigned/Number of units

False, janitorial services include cleaning and maintenance of commercial property like professional & educational offices, industrial business etc. Therefore, the cost of such services is an indirect cost both for custodial services department and shoe production department in a shoe factory.