Question : Objective 17.1 1) Costing systems that used for the costing of : 1211879

Objective 17.1

1) Costing systems that are used for the costing of like or similar units of products in mass production are called ________.

A) inventory-costing systems

B) job-costing systems

C) process-costing systems

D) weighted-average costing systems

2) Which of the following companies is most likely to use process costing?

A) Crimpson Color, a company selling customized garments for niche customers

B) Effel & Associates, a consulting firm providing various audit and related services

C) Red Paste Inc., a company manufacturing and selling toothpaste on a large scale

D) Grimpy Corp., a company manufacturing furniture for customers as per their requirements

3) Process costing should be used to assign costs to products when ________.

A) the units produced are similar

B) cost reduction is the top most priority

C) the units produced are dissimilar

D) cost reduction is not the primary objective

4) Which of the following statements is true?

A) In a job-costing system, average production cost is calculated for all units produced.

B) In a process-costing system, each unit uses approximately the same amount of resources.

C) In a job-costing system, overheads are allocated to all units equally.

D) In a process-costing system, individual jobs use different quantities of production resources.

5) Which of the following statements is true of conversion costs?

A) In process costing, they include all the factors of production.

B) They include all manufacturing costs including direct materials, direct labor, and other direct and indirect manufacturing costs.

C) In process costing, they are usually considered to be added evenly throughout the production process.

D) They include only direct materials and excludes all other manufacturing and non-manufacturing costs.

6) An example of a business which would have no beginning or ending inventory but which could use process costing to compute unit costs would be a ________.

A) clothing manufacturer

B) corporation whose sole business activity is processing the customer deposits of several banks

C) manufacturer of custom houses

D) manufacturer of large TVs

7) Which of the following statements best describes conversion costs?

A) Conversion costs are all manufacturing and nonmanufacturing cost.

B) Conversion costs are all manufacturing costs other than direct materials costs.

C) Conversion costs are all nonmanufacturing costs including marketing costs.

D) Conversion costs are all nonmanufacturing costs other than fixed selling and distribution costs.

8) Job-costing systems separate costs into cost categories according to when costs are introduced into the process of manufacture.

9) The principal difference between process costing and job costing is that in job costing an averaging process is used to compute the unit costs of products or services.

10) If manufacturing labor costs are added to the process at a different time compared to other conversion costs, an additional cost category—direct manufacturing labor costs—would be needed to assign these costs to products.