Chapter 18 Process Costing

Question 1

Conversion costs

Answer 1

The cost to convert raw material into finished goods. Direct labor+manufacturing overhead.

Question 2

Equivalent units of production

Answer 2

Used to measure the amount of materials added to or work done on partially completed units and expressed in terms of fully completed units.

Question 3

Job Order Costing System

Answer 3

An accounting system that accumulates costs by job. Used by companies that manufacture unique products or provide specialize services.

Question 4

Process

Answer 4

One of a series of steps in manufacturing production; usually associated with making large quantities of smaller items.

Question 5

Process Costing System

Answer 5

An accounting system that accumulates cost by process. Used by companies that manufacture identical units through a series of uniform production steps or processes.

Question 6

Production Cost Report

Answer 6

A report prepared by a processing department for equivalent units of production, production cost, and the assignment of those costs to the completed and in process units.

Question 7

Transferred in Costs

Answer 7

Costs that were incurred in a previous process and brought into a later process as part of the product’s cost.

Question 8

Weighted-Average Method

Answer 8

Determined the average cost of equivalent units of production by combining beginning inventory costs with current period costs.