Respond that the following statements are TRUE or FALSE:

1) A production cost report is a part of the financial statements available to the shareholders of a company.

2) A production cost report helps managers identify the unnecessary costs that can be reduced in the production process.

Multiple Choice Questions:

3) Under a process costing system, inventory data for the balance sheet is provided by the:

A) Work-in-Process Inventory of each department.

B) Finished Goods account.

C) Production cost report.

D) Cost of Sold account.

4) A production cost report aids in preparing an income statement by:

A) Providing data for period costs incurred during the period.

B) Providing data for various inventory accounts.

C) Providing data for cost of goods sold during the period.

D) Providing data for revenues generated during the period.

5) Nexus Inc. uses a process costing system. It prepares a production cost report for each processing department. How will the managers of Nexus use these production cost reports to prepare the balance sheet at the end of an accounting period?

A) To determine the amount of current liabilities of the period

B) To determine the balance of inventory accounts

C) To determine the cost of goods sold during the period

D) To determine the amount of revenues generated during the period