Question 1

Companies that use a series of repetitive manufacturing processes to produce standardized products should use a process costing system.

Accepted Answer

A) True 
 B)False

Question 2

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units:
Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion.
Units started and completed: 250,000.
Units completed and transferred out: 330,000.
Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $37,200.
Costs in beginning Work in Process - Conversion: $79,700.
Costs incurred in October - Direct Materials: $646,800.
Costs incurred in October - Conversion: $919,300.
Calculate the equivalent units of materials.

Accepted Answer

A)  250,000 
B)  317,000 
C)  294,000 
D)  333,000 
E)  342,000 
A)  250,000 
B)  317,000 
C)  294,000 
D)  333,000 
E)  342,000

Question 3

After posting all actual factory overhead and applying factory overhead to production departments in a process costing system,

Accepted Answer

A)  there will never be underapplied overhead. 
B)  there will never be overapplied overhead. 
C)  there will always be underapplied overhead. 
D)  there will always be overapplied overhead. 
E)  there may be over or underapplied overhead. 
A)  there will never be underapplied overhead. 
B)  there will never be overapplied overhead. 
C)  there will always be underapplied overhead. 
D)  there will always be overapplied overhead. 
E)  there may be over or underapplied overhead.

Question 4

In a process costing system, the entry to record cost of materials assigned to a production department requires a debit to the Raw Materials Inventory account and a credit to the Work in Process Inventory account for that department.

Accepted Answer

A) True 
 B)False

Question 5

The following data is available for Donaldson Corp. for the current year:
Beginning inventory of Work in Process 12,000 units, 60% completed
Ending inventory of Work in Process 18,000 units, 30% completed
Units completed and transferred to
finished goods during the year 144,000 units
Calculate the equivalent units of production for the year using the weighted average method.

Accepted Answer

Physical % of Work E

Question 6

Which of the following products is least likely to be produced in a process operations system?

Accepted Answer

A)  Compact disks 
B)  Slacks for casual wear 
C)  Baseball hats 
D)  Calculators 
E)  Custom cabinets 
A)  Compact disks 
B)  Slacks for casual wear 
C)  Baseball hats 
D)  Calculators 
E)  Custom cabinets

Question 7

Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department: Units:
Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.
Units started and completed: 110,000.
Units completed and transferred out: 135,000.
Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $43,000.
Costs in beginning Work in Process - Conversion: $48,850.
Costs incurred in February - Direct Materials: $287,000.
Costs incurred in February - Conversion: $599,150.
Calculate the cost per equivalent unit of materials.

Accepted Answer

A)  $2.00 
B)  $2.05 
C)  $1.74 
D)  $2.36 
E)  $2.61 
A)  $2.00 
B)  $2.05 
C)  $1.74 
D)  $2.36 
E)  $2.61

Question 8

Bagger, Inc. uses a process costing system. The following operating and cost data occurred during October:
   Materials are added at the beginning of the process. Direct labor and overhead are incurred evenly throughout the process. Prepare the October process cost summary assuming the weighted average method of inventory costing.

Accepted Answer

The answer of Bagger, Inc. uses a process costing system....

Question 9

When the completed goods are sold, the cost of the completed goods are transferred to ________.

Accepted Answer

The answer of When the completed goods are sold, the...

Question 10

An ________is the number of units that could have been started and completed given the costs incurred during the period.

Accepted Answer

The answer of An ________is the number of units that...

Question 11

During March, the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to conversion. Compute the number of physical units transferred to finished goods.

Accepted Answer

A)  110,000. 
B)  135,000. 
C)  105,000. 
D)  165,000. 
E)  144,000. 
A)  110,000. 
B)  135,000. 
C)  105,000. 
D)  165,000. 
E)  144,000.

Question 12

A materials consumption report is used instead of materials requisitions in companies where materials move continuously through the manufacturing process.

Accepted Answer

A) True 
 B)False

Question 13

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department.   If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the conversion costs?

Accepted Answer

A)  Work in Process-Labeling $183,100; Work in Process-Canning $183,100. 
B)  Work in Process-Labeling $196,000; Work in Process-Canning $196,000. 
C)  Finished Goods-Labeling $183,100; Finished Goods-Canning $183,100. 
D)  Work in Process-Labeling $196,000; Finished Goods-Canning $196,000. 
E)  Finished Goods $242,800; Work in Process $242,800. 
A)  Work in Process-Labeling $183,100; Work in Process-Canning $183,100. 
B)  Work in Process-Labeling $196,000; Work in Process-Canning $196,000. 
C)  Finished Goods-Labeling $183,100; Finished Goods-Canning $183,100. 
D)  Work in Process-Labeling $196,000; Finished Goods-Canning $196,000. 
E)  Finished Goods $242,800; Work in Process $242,800.

Question 14

The combined costs of direct labor and factory overhead per equivalent unit used by many businesses with process operations is called:

Accepted Answer

A)  Physical cost per equivalent unit 
B)  Overhead cost per equivalent unit 
C)  Combined cost per equivalent unit 
D)  Conversion cost per equivalent unit 
E)  Finished cost per equivalent unit 
A)  Physical cost per equivalent unit 
B)  Overhead cost per equivalent unit 
C)  Combined cost per equivalent unit 
D)  Conversion cost per equivalent unit 
E)  Finished cost per equivalent unit

Question 15

Which of the following statements is most accurate?

Accepted Answer

A)  In process costing, estimating the degree of completion of units is usually more accurate for conversion costs than for direct materials. 
B)  The FIFO method includes the cost of the beginning Work in Process inventory account in calculating cost per equivalent units. 
C)  The FIFO method computes equivalent units based only on production activity in the current period, ignoring the percentage of completion in beginning Work in Process inventory. 
D)  The FIFO method of calculating equivalent units of production merges the work and the costs of the beginning inventory with the work and the costs done during the current period. 
E)  It is not possible for there to be a significant difference between the cost of completed units between the weighted average and the FIFO methods. 
A)  In process costing, estimating the degree of completion of units is usually more accurate for conversion costs than for direct materials. 
B)  The FIFO method includes the cost of the beginning Work in Process inventory account in calculating cost per equivalent units. 
C)  The FIFO method computes equivalent units based only on production activity in the current period, ignoring the percentage of completion in beginning Work in Process inventory. 
D)  The FIFO method of calculating equivalent units of production merges the work and the costs of the beginning inventory with the work and the costs done during the current period. 
E)  It is not possible for there to be a significant difference between the cost of completed units between the weighted average and the FIFO methods.

Question 16

Direct labor and indirect labor are recorded, respectively, to:

Accepted Answer

A)  Factory Overhead and Work in Process Inventory. 
B)  Work in Process Inventory and Finished Goods Inventory. 
C)  Finished Goods Inventory and Work in Process Inventory. 
D)  Work in Process Inventory and Factory Overhead. 
E)  Cost of Goods Sold and Finished Goods Inventory. 
A)  Factory Overhead and Work in Process Inventory. 
B)  Work in Process Inventory and Finished Goods Inventory. 
C)  Finished Goods Inventory and Work in Process Inventory. 
D)  Work in Process Inventory and Factory Overhead. 
E)  Cost of Goods Sold and Finished Goods Inventory.

Question 17

The second step in accounting for production activity in a period, after determining the physical flow of units, is to compute ________.

Accepted Answer

The answer of The second step in accounting for production...

Question 18

The cost object in a process costing system is the specific job.

Accepted Answer

A) True 
 B)False

Question 19

Since the process cost summary describes the activities of a production department for a specified reporting period, it does not present information about any costs incurred in prior periods.

Accepted Answer

A) True 
 B)False

Question 20

Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the FIFO method of inventory costing. The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned all units that were completed and transferred during August.

Accepted Answer

The answer of Refer to the following information about the...

Companies that use a series of repetitive manufacturing processes to produce standardized products should use a process costing system.

After posting all actual factory overhead and applying factory overhead to production departments in a process costing system,

In a process costing system, the entry to record cost of materials assigned to a production department requires a debit to the Raw Materials Inventory account and a credit to the Work in Process Inventory account for that department.

Which of the following products is least likely to be produced in a process operations system?

When the completed goods are sold, the cost of the completed goods are transferred to ________.

An ________is the number of units that could have been started and completed given the costs incurred during the period.

A materials consumption report is used instead of materials requisitions in companies where materials move continuously through the manufacturing process.

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the conversion costs?

The combined costs of direct labor and factory overhead per equivalent unit used by many businesses with process operations is called:

Which of the following statements is most accurate?

Direct labor and indirect labor are recorded, respectively, to:

The second step in accounting for production activity in a period, after determining the physical flow of units, is to compute ________.

The cost object in a process costing system is the specific job.

Since the process cost summary describes the activities of a production department for a specified reporting period, it does not present information about any costs incurred in prior periods.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Activity Based Costing and Analysis

Cost Behavior Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Analyzing for Business Transactions

Partnership Accounting

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Exam 3: Process Costing and Analysis

Companies that use a series of repetitive manufacturing processes to produce standardized products should use a process costing system.

After posting all actual factory overhead and applying factory overhead to production departments in a process costing system,

In a process costing system, the entry to record cost of materials assigned to a production department requires a debit to the Raw Materials Inventory account and a credit to the Work in Process Inventory account for that department.

Which of the following products is least likely to be produced in a process operations system?

When the completed goods are sold, the cost of the completed goods are transferred to ________.

An ________is the number of units that could have been started and completed given the costs incurred during the period.

A materials consumption report is used instead of materials requisitions in companies where materials move continuously through the manufacturing process.

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the conversion costs?

The combined costs of direct labor and factory overhead per equivalent unit used by many businesses with process operations is called:

Which of the following statements is most accurate?

Direct labor and indirect labor are recorded, respectively, to:

The second step in accounting for production activity in a period, after determining the physical flow of units, is to compute ________.

The cost object in a process costing system is the specific job.

Since the process cost summary describes the activities of a production department for a specified reporting period, it does not present information about any costs incurred in prior periods.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Activity Based Costing and Analysis

Cost Behavior Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Analyzing for Business Transactions

Partnership Accounting

Filters