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I Question 1A: True / False Questions (10 marks) (A1) 1. Process cost accounting focuses on the process involved in mass-producing products that are very similar in nature. 2. Process cost systems are used to apply costs to a specific job, such as the manufacturing of a specialized machine, 3. A company that produces motion pictures would likely use a process cost system. 4. In a process cost system, costs are tracked through a series of connected manufacturing processes or departments, rather than by individual jobs. 5. In a process cost system, materials, labor and overhead are only added in the first production department 6. The value of target costing depends on having reliable estimates of sales demand. 7. An important use of life cycle costing is to decide whether to go ahead with the development of a new product. 8. Life cycle costing encourages management to find a suitable balance between investment costs and operating expenses. 9. There are no units in ending work in process at the end of the period under the FIFO method. 10. Companies using the weighted average method do not complete units left over from the previous accounting periods, they start new units. Question 1B: (15 marks) (B1, C2) Ahlia Products Company uses an automated process to clean and polish its souvenir items. For March, the company had the following activities: Beginning work in process inventory Units placed in production Ending work in process inventory 80 items, 40% complete 200 units 160 items, 75% complete Beginning work-in-process direct materials $1,000 Beginning work-in-process conversion $1,000 Direct materials added during month $1,200 Direct manufacturing labor during month $900 Factory overhead during month $140 Direct materials are placed into production at the Ending of the process and conversion costs are incurred evenly throughout the process. Instructions: Prepare a production cost worksheet using the FIFO method