Question

Conversion costs include the cost of purchasing and converting w o rd products 7) In a production cost report the number of units to count for units accounted for always bee n themes of 3) The cost amounts that are transferred out from one process to for the receiving process other proces becometered in costs 9) The weighted average method determines the cost of equivalent units of production by counting for beginning inventory costs separately from current period costs 10) The cost per equivalent unit for transferred in units is calculated by dividing total transferred in costs by the equivalent units of production for transferred in 10) 11) Cost amounts that are transferred out of one process become the transferred in cost for the next proces 12) The Raw Materials Inventory account is debited when direct materials are issued for production 13) When indirect materials are issued to production, the Manufacturing Overhead account is credited. 14) Under process costing depreciation on plant machinery is debited to the respective process's Work-in-Process Inventory 15) A predetermined overhead allocation rate is used to allocate direct materials cost to various processes or departments.

TRUE OR FALSE

Answer 1

6) Answer: False

Conversion costs include the direct labor costs and the manufacturing overhead costs. It does not include the cost of purchasing raw materials or the direct material costs.

7) Answer: False

In a production cost report, the number of units to account for must always be equal to the number of units accounted for.

8) Answer: True

The costs are transferred from the transferor process to the transferee process for whom they become the transferred in costs.

9) Answer: False

The weighted average method determines the cost of equivalent units of production by accounting for both the beginning inventory costs and the costs incurred during the period together.

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