1.

Process costing would be more likely use by the companies who are involved in producing
relatively homogeneous (Identical products) goods and services in batches by following continuous
and consistent processes.

Companies that produce generally homogeneous (identical products) goods and services in
batches while adhering to continuous and reliable processes are more likely to use process costing.

2. weighted average method: combines beginning inventory costs (prior period work) with
costs from current period work. first-in, first-out (FIFO) method: separates beginning inventory costs
(prior period work) from costs of current period work.

The weighted average method combines the costs from the current period's work with the
costs from the beginning inventory. First-in, first-out (FIFO) method, however, separates the costs of
current period work from those of the beginning inventory.

3. Equivalent units of production are a concept used to understand how much money partially
completed products are worth to a company. They are useful for process costing, which is the
analysis of money flow within the manufacturing process.

The idea of equivalent units of production is used to calculate how much money partially
completed products are worth to a business. They are helpful for process costing, which examines
the flow of money across the manufacturing process.

4. This statement is partially correct, as one equivalent unit can only be used as the
benchmark, when the valuation of any unit is to be made from the same batch of the units
produced.

This statement is only partially true because one equivalent unit can only be used as a
benchmark when valuing all units produced in the same batch.

5. The units started and completed in a period are calculated as the total units completed
during the period minus the units that were in the beginning inventory. The FIFO method separates
the effort found in beginning work in process from the effort added during the period; the weighted
average method combines this effort. This difference is reflected in the equivalent units calculations
and in the unit cost calculations.

The units started and completed during a period are determined by subtracting the units
from the beginning inventory from the total number of units finished during the time. The effort
added at the beginning of the work in process and the effort added during the period are separated
by the FIFO method and combined by the weighted average method, respectively. Both the
equivalent unit computations and the unit cost calculations take the difference into account.

6. To calculate the goods transferred out, simply take the units transferred out times the sum
of the two equivalent unit costs (materials and conversion) because all items transferred to the next
department are complete with respect to materials and conversion, so each unit brings all its costs.

7. Add the cost of beginning inventory to the cost of purchases during the period. This is the
cost of goods available for sale. Multiply the gross profit percentage by sales to find the estimated
cost of goods sold. Subtract the cost of goods available for sold from the cost of goods sold to get
the ending inventory.
10. The standard costing is the managerial accounting tool and under this tool, the standards are
laid down for different costs components. This makes the process costing more efficient in
computational as well as in a clerical manner due to:

a. Standard costing focuses on the control as well as the measurement of the present activities of
production and the current period costs.

b. The standard values are used as the benchmarks for every component of cost in order to simplify
the procedure of costing as well as remove the re-computations of periodic cost.

c. Using the standard quantities as well as cost permit the overhead variances, materials and labor to
be determined during the period.

11. A hybrid costing system is a cost accounting system that includes features of both a job
costing and process costing system. Hybrid costing is most commonly used in situations where there
is identical processing of a baseline product, as well as individual modifications that are made
beyond the baseline level of processing.

12. Method of neglect simply excludes the spoiled units in the equivalent units schedule. The
costs of normal shrinkage and normal continuous losses in a process costing environment are
handled through the method of neglect.

13. In inventory accounting, abnormal spoilage must be posted as a separate entry. It should be
treated as an expense since it is incurred and cannot be recovered. Normal spoilage is recorded as
cost of goods sold, since it is considered part of the natural production process. Normal spoilage is
absorbed as part of the product cost, but abnormal spoilage costs are treated separately.