READING ASSIGNMENT
Chapter 4 very briefly returns to the topic of job order costing, focusing specifically on cost flows. The Chapter then introduces us to the process costing method and begins to compare the two methods and discuss the reasons why one method might be used rather than the other. Additional inventory accounts are discussed in order to describe how cost data is captured during certain manufacturing situations. Finally, an important management tool, the production cost report is introduced.
Chapter 4 End-Of-Chapter Questions
*Please scroll down to the bottom section of this page to see last week’s end-of-chapter answers.
The end-of-chapter questions give you an opportunity to self-assess your knowledge of what you have learned so far. Answers to these questions will be provided in a separate section on next week’s Reading Assignment page. Each week, you are highly encouraged to create a separate heading/section in your Learning Journal, label it “End-Of-Chapter Questions,” and write your answers to these questions under that heading. Your answers to the end-of-chapter questions will not count towards your final grade, but they are still part of the UoPeople learning process and it is expected that you will answer them to ensure understanding of the materials presented in the reading. Comparing your answers with the provided correct answers the following week, will help you understand the reading better, and also help you perform better on future Graded Quizzes and the Final Exam.
Question 1: What are transferred-in costs?
Question 2: Explain the difference between physical units and equivalent units.
Question 3: Explain the concept of equivalent units assuming the weighted average method is used.
Question 4: Explain why direct materials, direct labor, and overhead might be at different stages of completion at the end of a reporting period.
Question 5: Describe the basic cost flow equation and explain how it is used to reconcile units to be accounted for with units accounted for.
Question 6: Describe the basic cost flow equation and explain how it is used to reconcile costs to be accounted for with costs accounted for.
Question 7: How does a company determine the number of production cost reports to be prepared for each reporting period?
Question 8: What is a production cost report, and how is it used by management?
Question 9: Explain how the cost per equivalent unit might be misleading to managers, particularly when a significant change in production is anticipated.
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