Styles Paragraph TRUE FALSE Write it the statement is true and it the statement is talse. 1) A top-selling product might actually result in losses for the company. 1)_T_ 2) Companies that overcost products will most likely lose market share. 2) _F_ 3) As product diversity and indirect costs increase, it is usually best to switch away from an activity based cost system to a broad averaging system 3) __F__ 4) If a company overcosts one of its products, then it will undercost at least one of its other products. 4) T 5) Direct costs plus indirect costs equal total costs. 5) T_ 6) F 6) When refining a costing system, a company should dassify as many costs as possible as direct costs. LI 7) In a homogeneous cost pool all costs have a similar cause-and-effect relationship with the cost-allocation base 8) Direct trading of costs improves cost accuracy 9) T 9) A cost-allocation base is a necessary element when using a strategy that will refine a costing system 10) ABC systems are a further refinement of department costing systems 10)_T 11) Examples of industries that would use process costing include the soft drink bottling and oil industry F 12) The principal difference between process costing and job costing is that in job costing an averaging process is used to compute the unit costs of products or services 13) Process-costing systems separate costs into cost categories according to the timing of when costs are introduced into the process 13)__T_ ates) 14) Estimating the degree of completion for the calculation of equivalent units is usually easier for conversion costs than it is for direct materials 14)_F_ 16) 15) Job-order costing would be most likely used by a firm that produces homogeneous products 16) When identical or similar units of products or services are mass produced, job-costing is used to calculate an average production cost for all units produced 17) The weighted average process costing method does NOT distinguish between units started in the previous period but completed during the current period and units started and completed during the current period 18) Equivalent units in beginning work in process PLUS equivalent units of work done in the current period MINUS equivalent units completed and transferred out in the current period EQUALS equivalent units in ending work in process 13) F 19) __F_ 19) In the weighted average costing method, the costs of direct materials in beginning inventory are NOT induded in the cost per urut calculation since direct materials are almost always added at the start of the production process 20) To calculate weighted average conversion cost per equivalent unit, you multiply total conversion costs to date by total equivalent units of work done to date