1. What are the concepts underlying a process costingsystem? How might a company identify and groupactivities into a particular process?2. What information is contained in a production report?What are equivalent units and how would a companycalculate them? How does the production report andequivalent units relate to unit costs?3. Inventory in each process can be accounted for usingfirst-in first-out (FIFO) or weighted average costingmethods. Why would a company choose to use FIFOcosting? Why would a company choose to use weightedaverage costing?

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1. What are the concepts underlying a process costing system? How might a company identify and group activities into a particular process?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 9MC: Which is not a step In activity-based costing? A. identify the activities performed by the...

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Question

1. What are the concepts underlying a process costing
system? How might a company identify and group
activities into a particular process?
2. What information is contained in a production report?
What are equivalent units and how would a company
calculate them? How does the production report and
equivalent units relate to unit costs?
3. Inventory in each process can be accounted for using
first-in first-out (FIFO) or weighted average costing
methods. Why would a company choose to use FIFO
costing? Why would a company choose to use weighted
average costing?

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Which is not a step In activity-based costing? A. identify the activities performed by the organization B. identify the cost driver(s) associated with each activity C. compute a cost rate per production D. assign costs to products by multiplying the cost driver rate by the volume of the cost driver units consumed by the product
Which of the following product situations is better suited to job order costing than to process costing? A. Each product batch is exactly the same as the prior batch. B. The costs are easily traced to a specific product. C. Costs are accumulated by department. D. The value of work in process is based on assigning standard costs.
Happy Trails has this information for its manufacturing: Â Its income statement under absorption costing is: Prepare an income statement with variable costing and a reconciliation statement between both methods.
Trail Outfitters has this information for its manufacturing: Its income statement under absorption costing is as follows: Prepare an income statement with variable costing and a reconciliation statement between both methods.
Frenchys has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: What is the predetermined overhead rate for each activity?
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In the variable costing income statement, how are the fixed manufacturing costs reported, and how are the fixed selling and administrative expenses reported?
In a process costing system, which account shows the overhead assigned to the department? A. cost of goods sold B. finished goods inventory C. raw material inventory D. work in process inventory
Assigning indirect costs to departments is completed by __________________________. applying the predetermined overhead rate debiting the manufacturing costs incurred applying the costs to manufacturing overhead applying the costs to work in process inventory
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Describe the product life cycle. How do unit-level costs behave in relation to the product life cycle? Batch-level costs? Product-level costs? Facility-level costs?