Hi I have a few questions to ask about process cost systems.?

Question

As I was doing A self Examination Test worksheet I found online. I came across these questions which i don't fully understand or got stuck on or got confused on. Help me find the right answers and explain if possible to your best ability. Thank You. Just trying to understand these stuff.

1. For which of the following businesses would a process cost system be appropriate?

a. Auto repair service

b. Paint manufacturer

c. Specialty printer

d. Custom furniture manufacturer

2. Which of the following is not a characteristic of a process cost system?

a. Manufacturing costs are grouped by departments.

b. The system may use several Work-in-Process accounts.

c. The system measures costs for each completed job.

d. The system allocates costs between completed and partially completed units within a department.

6. Equivalent production units, usually are determined for

a. direct materials and conversion costs.

b. direct materials only.

c. conversion costs only.

d. direct materials and direct labor costs only.

9. Just-in-time processing is a business philosophy that focuses on reducing time and cost and eliminating poor quality. This is accomplished in manufacturing and non-manufacturing processes by:

a. moving a product from process to process as each function is completed

b. combining processing functions into work centers and cross-training workers to perform more than one function

c. having production supervisors attempt to enter enough materials into manufacturing to keep all manufacturing departments operating

d. having workers typically perform one function on a continuous basis

Answer 1

1. Answer a. A paint manufacturer produces many identical units of its products, so process costing is appropriate. The other three firms provide services that vary in nature from job to job, so they would use job costing.

2. Answer b. Process costing allocates costs all along the production process, not at the end of completed jobs.

6. Answer a. Two equivalent units of production figures are computed - one for materials and one for conversion.

9. Answer b. Just-in-time processing is a facet of the 'lean thinking model' of production. One of the steps in this model is to create 'manufacturing cells' in which each employee is trained to perform all the steps within that cell.