Choice (15 marks) Process cost costing would be used in all of the following industries except A petroleum refining, B. chemicals. c truck tire manufacturing D. wood pulp production E automobile repair Scully Products Ltd., uses a process costing system Completed production from Department No. 115 transferred to Department No. 2 for further manufacturing Which of the following best describes the account that would be debited to record this transaction? A. Cost of Goods Sold. B. Finished Goods Inventory - Department No. 1. C. Finished Goods Inventory - Department No. 2 D. Work in Process Inventory - Department No. 1 E. Work in Process Inventory - Department No. 2 - SC A esta 3. Companies that use a process costing system would: establish a separate Work-in-Process inventory account for each manufacturing department. establish a separate Finished Goods inventory account for each manufacturing department. C. transfer completed production directly to Cost of Goods Sold. charge goods produced with actual overhead amounts rather than applied overhead amounts. | E. eliminate the need for the Finished Goods inventory account. 4. Which of the following choices correctly shows how costs are accumulated in a process costing system? By Batch By Time Period By Department Yes Yes Yes Yes Yes No No Yes No Yes Yes No No Yes No Moew 5. Pulo Corporation uses a weighted average process costing system. The company has two processing departments. Production starts in the Assembly Department and is completed in the Finishing Department. The units completed and transferred out the Assembly Department during April will become the units: A. in April's ending Work-in-Process in Finishing. B. in May's beginning Work-in-process in Finishing c. units started in production in Finishing for April D. units started in production in Finishing for May. Page 5 of 8 Anton na red at which of the following activity levels should not be allocated to products for decision- s incurred at whi aking purposes? Unit-level activity Batch-level activity Product-level activity Fc in costine Organization-sustaining activity 17 Testing a prototype of a new product is an example of an activity at which of the following levels? A Unit-level activity B. Batch-level activity C Product-level activity, D. Organization-sustaining activity 0,000 Shooa - 23.2 8. Andiano Manufacturing produces two types of tablets basic and deluxe. The tablets are produced using one continuous process. Four activities have been identified: machining, setups, receiving and packing The overhead activities, their costs, and the other related data are as follows: Product Machine Setups Receiving Packing Hours Orders Orders 20,000 2 200 00 100 Deluxe 800 200 20.000 4.000 Costs $80,000 $60,000 $10,000 $30,000 Basic 500 What is the activity rate for packing that is based on packing orders? A. $1.20 per packing order. B. $6.25 per packing order. C. $9.00 per packing order. noorder. D. $10.00 per packing order. B. $6 20 per pack rate for par Which of the following statements about overhead allocation based on volume alone is correct? A) It will systematically over-cost high-volume products and under-cost low-volume products. B) It must be used for external financial reporting. C) It will systematically over-cost low-volume products and under-cost high-volume products. D) It is a key aspect of the activity-based costing model. 10. Which of the following is NOT a limitation of activity-based costing? A) In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system. This results in overstated costs. B) Maintaining an activity-based costing system is more costly than maintaining a traditional direct labour-based costing system. C) Changing from a traditional direct labour-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers. D) More accurate product costs may result in increasing the selling prices of some products Page 6 of 8