 In this presentation we will take a look at multiple choice questions related to a process cost system. We'll take a look at test taking skills with relation to multiple choice questions with relation to the process cost system. Support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. First question, which of the following products would not use a process cost system? A. DVDs B. Genes C. Soccer balls D. Hard drives E. Custom tile. So we'll go through this again and then we'll use the process of elimination to see if we can eliminate some of these items using the process of elimination. Which of the following products would not use a process cost system? So first let's consider the process cost system. When you think of the process cost system you're comparing it really to a job cost system typically. Therefore what we expect to see in the answer is going to be things that we produce because we're producing inventory of some kind and types of things that would apply to a job cost or a process cost system. As you go through this the main thing I would consider between the two when would we use one versus another a job cost or a process cost would be you use a job cost when they're different in nature and a process cost when they're similar or in other words a job cost when you have unique items or custom items and a process cost when you have very similar items that you're basically mass producing. So keeping that in mind as we go through here we're looking for the items that we would use a process cost system. So we would not use a process cost system so in other words we'd probably be using a job cost system. So DVDs if we consider DVDs then those are all pretty much the same. You would think that I would once we know what the DVDs on it we'd probably just process those and you could think of just a machine doing that so anything you could think of a machine doing very well without any help that's usually going to be something that's using a process cost system and not a job cost system. So I would think it wouldn't be DVDs because we're really looking in essence for a job cost system because we're not using a process cost system. The next item is jeans. Now jeans sound a little bit more complex than I mean it depends on the kind of jeans I guess you know I mean there's custom jeans these days so I'll keep that for now you know I don't know that it's not the DVDs but it seems like that would be probably next one. Soccer balls soccer balls I would think that are pretty custom I mean pretty standardized like I would think a machine can basically just crank out soccer balls that's my imagination on soccer balls would be. So I would think that that would be using a process cost system and hard drives if we're talking about a hard drive and like a computer again that's something that I'm imagining is put together with very little manual components or customization typically needed possibly so I'm going to say no no on the hard drive and then custom tile now note that anything that says custom and the answer and you're making something like inventory would indicate a job cost system because it's clearly going to be custom or unique so of the two I would choose the custom tile as opposed to the jeans the jeans then I'm going to say that's going to be process and I would think that E then would be our answer so if we go through this again which of the following products would not use a process cost system E custom jeans again the idea of custom really is going to be the word that's going to stand out and should be able to make that a very fairly easy choice next question which does not generally apply to a process operations system a product separate identification b partially completed products are transferred between processes see different processes are managed separately d equivalent units are used to compute costs so let's go through this again and go through the process of elimination which does not generally apply to a process operations system okay so process operations I'm thinking process cost type of system as opposed to a job cost system so I'm always kind of looking to compare those two if I'm looking I'm thinking about a manufacturing company these terms seem to deal with manufacturing type companies and usually the two systems here are going to be a process or job cost I'm considering here process operations being a term for a process cost system so keeping that in mind we'll go through these items and see if I can you know cross anything out that looks obviously not to be appropriate a product separate identification so these are characteristics which does not generally apply to a process operation system so remember that the operation system like is going to be tracking things as they go we're usually thinking about things that are going to be all the same as opposed to a to a job cost system which will typically be applying costs to a particular job so product separate identification I would kind of think that that would be by a job to a job and not apply to a process so it might be a b partially completed products are transferred between processes now again that that's true under a process cost system it might be true under a job cost system as well so I'll keep that one for now see different processes are managed separately so now again our emphasis there is on the processes so I would think that that's going to be part of a process cost system so I'm going to say that one's cross that one out b equivalent units are used to compute costs now again we might not know what an equivalent unit is so I'll keep that one here and then I'm going to go back up to b where it says partially completed products are transferred between processes I note there we might think that that applies to a job cost or and or a process cost but it's saying here which does not generally apply to a process cost so I would think that that would be part of a process cost because partially completed products are transferred between processes again the goals on the process so I'm going to say that b looks pretty good and let's keep it between a and d and go through it again which does not generally apply to a process operations system a product separate identification or d equivalent units are used to compute costs so even if we're not really sure about this equivalent unit thing we might still go with a up here because the product separate identification you would think would go to a job cost system and not to a process cost system because of course the process cost system means that we don't know separately identified processes or units of inventory so given that I would think a and then to consider the equivalent units the equivalent units are typically something that we're going to use not in a job cost system but in a process cost system to help us to apply the costs out to the proper process so the equivalent units is something that we would typically use in a process cost system