Question

1.

When beginning and ending inventories are equal in terms of the percentage of completion for both direct materials and conversion costs:

Select one:

a. The FIFO and weighted-average methods of process costing will result in different dollar amounts for both direct materials and conversion costs of costs being transferred to the next department

b. The FIFO and weighted-average methods of process costing will result in the same dollar amount of costs being transferred to the next department for direct materials but a different dollar amount for conversion costs.

c. The FIFO and weighted-average methods of process costing will result in the same dollar amount of costs being transferred to the next department

d. None of the statements listed are correct.

2.

If fixed overhead-cost rates were based on actual short-term usage, periods of higher demand would result in:

Select one:

a. Could be higher or lower costs per unit

b. The same costs per unit

c. Lower costs per unit

d. Higher costs per unit

Answer 1

Ans:

1.

When beginning and ending inventories are equal in terms of the percentage of completion for both direct materials and conversion costs Both the  FIFO and weighted-average methods of process costing will result in different dollar amounts for both direct materials and conversion costs of costs being transferred to the next department because the weighted average method includes the opening and closing work in progress to calculate the process costs and FIFO method do not include Opening and Closing WIP to calculate the process costs.

So correct answer is option A.

2.

If fixed overhead-cost rates were based on actual short-term usage, periods of higher demand would result in Lower cost per Units, because when the sales units increases the fixed costs will be devided in more units, which will result in lower cost per unit.

So correct answer is option C.

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