23.

Costs of normal shrinkage and normal continuous losses in a process costing environment are
handled

by the method of neglect.

ANS: T DIF: Moderate OBJ: 6-8

24. Costs of normal shrinkage and normal continuous losses in a process costing environment are
handled

by the method of accretion.

ANS: F DIF: Moderate OBJ: 6-8

25. A continuous loss is assumed to occur at a specific point in the production process.

ANS: F DIF: Easy OBJ: 6-8

26. A discrete loss is assumed to occur at a specific point in the production process.

ANS: T DIF: Easy OBJ: 6-8

27. Abnormal spoilage is always accounted for on an equivalent unit basis.

ANS: T DIF: Easy OBJ: 6-8

COMPLETION

1. All manufacturing costs other than direct materials are referred to as _______________________

ANS: conversion costs

DIF: Easy OBJ: 6-1

2. The process costing system that computes equivalent units on beginning work in process inventory as

well as work done in the current period is known as a ___________________________.

ANS: weighted average process costing method

DIF: Easy OBJ: 6-1

3. The process costing system that computes equivalent units on work done in the current period is

known as a ___________________________.

ANS: FIFO process costing method

DIF: Easy OBJ: 6-1

4. The number of completed units that could have been produced from the inputs applied is referred to
as

_______________________.

ANS: equivalent units

DIF: Easy OBJ: 6-2