Which of the Following Statements Is True

question 50

Multiple Choice

Which of the following statements is true?

• A) The Work in Process Inventory account is the focal point of process costing.
• B) Labor costs are accounted for differently from overhead costs in a process costing system.
• C) Equivalent units usually are computed for direct materials and overhead combined.
• D) To compute unit costs using the FIFO process costing approach, total costs of direct materials, direct labor, and overhead that have been accumulated in the Work in Process Inventory account or accounts are divided by the units worked on during the period.

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Definitions:

Assembly Department

A specialized department within a manufacturing facility where components are assembled into final products.

Equivalent Units

A measure used in the costing of products in process, which converts partially completed goods into an equivalent number of fully completed units.

Weighted-average

A mathematical calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning more weight to some numbers than others.

Conversion

The process of changing or converting resources into finished goods or services.