6. Costing Techniques

Process Costing — Quiz

Test your understanding of process costing with 5 practice questions.

Practice Questions

Question 1

When using the FIFO method in process costing, how are equivalent units for beginning work-in-process inventory treated?

Question 2

A company uses process costing. In Department A, 10,000 units were started. 8,000 units were completed and transferred out. The remaining 2,000 units in ending work-in-process are $70\%$ complete for conversion costs and $100\%$ complete for direct materials (added at the beginning of the process). What are the total equivalent units for direct materials for the period, assuming no beginning inventory?

Question 3

Which of the following scenarios would most appropriately use process costing rather than job order costing?

Question 4

In a process costing system, if normal spoilage occurs at the end of the production process, how is the cost of this spoilage typically handled?

Question 5

A company uses the weighted-average method. Beginning work-in-process has 500 units, $60\%$ complete for conversion costs. During the period, 2,000 units are started, and 1,800 units are completed. Ending work-in-process has 700 units, $40\%$ complete for conversion costs. What are the equivalent units for conversion costs for the period?