1. Conversion costs include: a) labour and overhead. b) materials and labour. c) materials and overhead, d) labour, overhead, and materials. 2. Most process costing systems use weighted average process costs. Which of the following is a characteristic of weighted average process costs systems? a) These systems account only for costs incurred during the current period. b) These systems are not appropriate for environments that involve mass production. c) The weighted average process cost system is required by GAAP. d) The weighted average considers the degree of completion (weighting) of the units completed and transferred out and the ending work in process. 3. Which of the following is not a difference in a job-cost environment and a process-cost environment? a) In a job-cost environment, only physical units are computed whereas in a process cost environment, equivalent units are computed. b) In a job-cost environment, fims compute a predetermined rate for overhead costs alone as these are the only costs that the firm allocates whereas in a process cost environment a firm must also allocate the cost of materials and conversion. c) A job-cost environment is appropriate for firms that produce customized products in small amounts whereas a process-cost environment is suitable in settings that involve mass production of like products. d) In a job-cost environment, costs are assigned only to finished goods and cost of goods sold whereas in a process-cost environment costs are assigned to work-in-process, finished goods, and cost of goods sold 1 4. Which of the following is a reason to use process costing? a) Record keeping is easier because the method attaches the same value to each completed unit without regard to the period in which the unit was made. b) Mass production c) Homogenous production of units. d) all of the above 5. Companies use process cost systems to apply costs to: a) similar products. b) products that are mass produced c) custom build d) A and B