UNIVERSITY OF CEBU-BANILAD
COLLEGE OF ACCOUNTANCY
BANILAD, CEBU CITY
Accounting 108 (Process Costing – EUP)
Name ________________________________ Course & yr. __________ Schedule _______________ Score __________
I – Multiple choice. Encircle the letter of the best answer in each of the given statement/s.
1. Which of the industries listed below is most likely to use process costing in accounting for production costs?
a.Road builderb. Electrical contractorc. Newspaper publisherd. Automobile repair shop
2. Which of the following characteristics applies to process costing but not to job-order costing?
a.Identifiable batches of productionc. Averaging process
b.Equivalent units of productiond. Use of standard costs
3. An equivalent unit of direct materials or conversion cost is equal to
a.The amount of direct materials or conversion cost necessary to complete one unit of production.
b.A unit of work-in-process inventory
c.The amount of direct materials or conversion cost necessary to start a unit of production in work-in-process.
d.Fifty percent of the direct materials or conversion cost of a unit of finished goods inventory (assuming a linear
production pattern)
4. In the computation of manufacturing cost per equivalent unit, the weighted-average method of process costing considers
a.Current costs only
b.Current cost plus cost of beginning work-in-process inventory
c. Current costs plus cost of ending work-in-process inventory
d.Current costs minus cost of beginning work-in-process inventory
5. An error was made in the computation of the percentage of completion of the current year’s ending work-in-process
(EWIP) inventory. The error resulted in assigning a lower percentage of completion to each component of the inventory
than actually was the case. Consequently, the following were misstated:
1.The computation of total equivalent units
2.The computation of costs per equivalent unit
3.Costs assigned to cost of goods completed for the period
What were the effects of the error?
1 2 3
a.UnderstateOverstateOverstate
b.UnderstateUnderstate Overstate
c.OverstateUnderstateUnderstate
d.OverstateOverstateUnderstate
6. In a process-costing system, the application of factory overhead usually is recorded as an increase
a.Cost of goods soldc. Factory overhead control
b.Work-in-process inventory controld. Finished goods control
7. The completion of goods is recorded as a decrease in work-in-process control when using
Job-order Costing Process Costing
a. YesNo
b. YesYes
c. NoYes
d. NoNo
8. Equivalent units of production are used in process accounting to
a.Measure the efficiency of the production process.
b.Establish standard costs
c.Provide a means of allocating cost to partially completed units
d.Allocate overhead to production
9. In process 2, material G is added when a batch is 60% complete. Ending work-in-process units, which are 50% complete,
would be included in the computation of equivalent units for
Conversion costs Material GConversion costs Material G
a. Yes No c. No No
b. No Yes d. Yes Yes
10. Assuming no beginning work-in-process inventory, and that the ending work-in-process inventory is 100% complete as
to materials costs, the number of equivalent units as to materials costs is
a.The same as the units placed in processc. Less than the units placed in process
b.The same as the units completedd. Less than the units completed
Questions 11 through 14 are related to the following list of nine concepts:
1.EUP to complete BWIP.
2.EUP from last period in BWIP.
3.Units transferred in.
4.Total units transferred out.
5.Units transferred out that were started and completed this period.
6.Units transferred out that were started last period and completed this period.
7.EUP to complete EWIP.
8.EUP completed in EWIP.
9.Total units in BWIP.