08-05

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1. A Which of the following statements regarding first-in, first- 4. C The FIFO method provides a major advantage over
out (FIFO) process costing is/are true? the weighted-average method in that:
(A) First-in, first-out (FIFO) process costing transfers out A.
the costs in beginning inventory before transferring out the the calculation of equivalent units is less complex
costs associated with units started and completed. under the FIFO method.
(B) First-in, first-out process costing requires one
additional step in assigning costs to the units transferred B.
out and the ending Work-in-Process Inventory. the FIFO method treats units in the beginning
A. A only. inventory as if they were started and completed
B. B only. during the current period.
C. Both A and B.
D. Neither A nor B. C.
the FIFO method provides measurements of work
2. B The computation of equivalent units under the FIFO
done during the current period.
method:
A.
D.
treats units in the beginning work-in-process inventory as if
the weighted-average method ignores units in the
they were started and completed during the current
beginning and ending work-in-process inventories.
period.
5. False In general, the ending Work-in-Process Inventory
B. value computed using first-in, first-out (FIFO) will be
treats units in the beginning work-in-process inventory as if the same as the ending value computed using
they represent a batch of goods separate and distinct from weighted-average process costing.
goods started and completed during the current period.
6. only In computing the current period's manufacturing cost
current per equivalent unit, the FIFO method of process
C.
period costing considers: (CPA adapted)
treats units in the ending work-in-process inventory as if
costs. A. only current period costs.
they were started and completed during the current
B. current period costs plus cost of beginning work-
period.
in-process inventory
C. current period costs less cost of beginning work-
D.
in-process inventory
ignores units in the beginning and ending work-in-process
D. current period costs plus the cost of ending work-
inventories.
in-process inventory
3. C In order to compute equivalent units of production using
7. True It is possible for units in the beginning Work-in-
the FIFO method of process costing, work for the period
Process Inventory to also be part of the ending
must be broken down to units
Work-in-Process Inventory.
A. completed during the period and units in ending
inventory. 8. True If the beginning Work-in-Process inventory is zero,
B. started during the period and units transferred out first-in, first-out (FIFO) and weighted-average
during the period. process costing will assign the same amount to the
C. completed from beginning inventory, started and units transferred out.
completed during the month, and units in ending inventory. 9. True First-in, first-out (FIFO) process costing transfers out
D. processed during the period and units completed the costs in beginning inventory before transferring
during the period. out the costs associated with units started and
completed.