Indicate Whether Each of the Following Statements About Process Costing

question 143

Short Answer

Indicate whether each of the following statements about process costing systems is true or false.A company that uses a process costing system may use separate predetermined overhead rates for each department involved in production.Company X completed 10,000 units of a product in January and had 1,000 units (80% completed) at the end of the month. Company X's equivalent whole units for January were 10,800.The reason for calculating the number of equivalent whole units for a period is to allocate product costs between work in process inventory and the cost of units completed and transferred out.A company that uses a process costing system completes a job cost sheet for each department each month.The transfer of goods from one processing department to another is an asset use transaction.

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Definitions:

Discount Rate

In DCF analysis, this is the rate used to ascertain the present value of forthcoming cash flows.

Gear Ratio

The ratio between the rates at which the last and first gears in a series turn, affecting the vehicle's performance and fuel efficiency.

Reduction Range

A gearset or mechanism designed to reduce the input speed to a lower output speed, increasing torque in applications like vehicle transmissions.

Idle Rpm

The rotational speed of an engine (in revolutions per minute) when it is idling, or running without any load or acceleration.