 In this presentation, we will take a look at multiple choice questions related to a process cost system taking a look at test taking skills as we go through. 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 then 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, characteristics of a process costing but not job order costing include a predetermined overhead rate b equivalent units of production c used in manufacturing process d used in cost of goods manufactured calculation and e only one work in process inventory account. So let's go through this again using the process of elimination. Characteristics of process costing but not job order costing include. So we're thinking about these two types of costing systems typical type of question. We want to know the job order costing versus the process costing. We're looking for the characteristics of the process costing. That are not part of the job order costing system. So they got to be part of the process costing, but not only that, not be part of the job order costing system. So note we're looking at process costing. Typically we're thinking about types of inventory types of units that are going to be processed or mass produced as opposed to specifically identified units of inventory as it goes through. So considering that let's go through these a predetermined overhead rate. So when considering the predetermined overhead rate, we're looking at that rate that deals with overhead, the application of overhead. And we might consider it in a process cost system, but we might not know if it's in both of the systems of the process cost and the job cost. So that's a use or an item that we're used to help allocate the overhead, but we might be confused on which system or both that might be used in. So let's keep that one for now. The second item be equivalent units of production. So equivalent units of production again, we might be a little concerned or a little confused as which one that is for. We typically do use that in a process cost system equivalent units of production. So we use that in order to apply out the costs between the different processes. So it is in the process cost system. We might not fully know if it's in a job cost system as well, because we're looking for something in a process cost system that is not in the job cost system. Keep that for now. See used in manufacturing process. So we're going to say it's going to be used in a manufacturing process. I would assume the job cost system and the process cost system. They're both used in the manufacturing process. So it's not either or we can use either system. So I'm going to say it's not that one because I know it's used in both are used in manufacturing just depends on the type of thing we're manufacturing. D used in cost of goods manufactured calculation. So characteristics. Well, both of those items if we're manufacturing something are going to have to calculate the cost of goods manufactured. So therefore I'm going to say that cost of goods manufactured or it's going to be in both. I'm going to say that's not it. And then he says only one work in process inventory account. Now there's only one work in process inventory account in the job cost system. Whereas the process cost system may use more than one work in process because we might have more than one processes and we have to track the work in process to the correct process. So the only one work in process is something that's not in both systems. However, it's only in the job cost system and we're looking for things that are in the process cost system that aren't in the job cost system. So it's not E because it's only in the job cost system. So we're left with A and B. Let's go through it again. Characteristics of process costing but not job order cost accounting include A predetermined overhead rate or B equivalent units of production. Now under these two note that A the predetermined overhead rate. We have to apply that to both systems. We use we know we have to use overhead or apply out overhead. So we're going to use some type of system to apply out overhead in both of them. So I'm going to say it's not a and we're going to go with B equivalent units of production. And that's the one we need to we need to have that just for the process cost system because the equivalent units of production are what's going to help us to know how to allocate costs between the separate processes. We don't have that necessity in the job cost system because we're tracking specifically to the job. So final answer characteristics of process costing but not job order cost accounting include B equivalent units of production. Next question. Number of units that could have been started and completed given the costs incurred for the period is a manufacturing overhead B units of production C finished goods D equivalent units of production and E work in process. Let's go through that using the process of elimination. Number of units that could have been started and completed given the costs incurred for the period is so they could have been started and completed. Let's go through them a manufacturing overhead. So manufacturing overhead doesn't really seem to have anything to do with you know actual units the units we could have incurred. So it doesn't quite sound right to me. I don't think that said B says units of production that has units in it. So that would I'm going to keep that for now. C says finished goods. So we have up here a number of units that could have been started and completed and finished goods could have been started or completed. It seems like finished goods should be a pretty set number. So I don't think that's I don't think it's going to be C D says equivalent units of production. So now we have another item that's in units. So that sounds like it could be a reasonable answer and he says work in process. So and we're if we've been working with this a while we work in process could include you know many different things in it. So like the the overhead the the amount of conversion cost and which is overhead direct labor and the materials. So it's not work in process is really kind of where we track the items in costs costs. Not really the units. So we're left with B and D. So let's go through this again. Number of units that could have been started and completed given the costs incurred for the period is either B units of production or D equivalent units of production. And between those two we're looking for the equivalent units. We're looking for the ones the number of units that could have been started. So we're using that kind of estimate one rather than units of production which is going to be more of a set number as opposed to us making this kind of estimate which is this is kind of like an estimate number of units that could have been started and completed is going to be that equivalent units number. So we're left with D here being the correct answer. Number of units that could have been started and completed giving the costs incurred for the period is D equivalent units of production.