Question 1

Which of the following is not one of the four steps in accounting for production activity and assigning costs during a period under a process cost system?

Accepted Answer

A)  Determine over or underapplied overhead. 
B)  Determine the physical flow of units. 
C)  Compute the equivalent units of production. 
D)  Compute the cost per equivalent unit of production. 
E)  Assign and reconcile costs. 
A)  Determine over or underapplied overhead. 
B)  Determine the physical flow of units. 
C)  Compute the equivalent units of production. 
D)  Compute the cost per equivalent unit of production. 
E)  Assign and reconcile costs.

Question 2

The following table of cost information is available for the Renaldo Company for the month of November:
   Based on the table of cost information above, prepare the general journal entry required to record the:
a. Transfer of goods from the molding department to the finished goods inventory.
b. Cost of goods sold for November.

Accepted Answer

a. Finished Goods Inventory 15

Question 3

What are the four steps in accounting for production activity in a period?

Accepted Answer

Accounting for a department's activity f

Question 4

Wyman Corporation uses a process costing system. The company manufactured certain goods at a cost of $800 and sold them on credit to Percy Corporation for $1,075. The complete journal entry to be made by Wyman at the time of this sale is:

Accepted Answer

A)  Debit Accounts Receivable $1,075; credit Sales $1,075; debit Cost of Goods Sold $800; credit Finished Goods Inventory $800. 
B)  Debit Accounts Receivable $1,075; credit Sales $275; credit Finished Goods Inventory $800. 
C)  Debit Cost of Goods Sold $1,075; credit Sales $1,075. 
D)  Debit Finished Goods Inventory $800; debit Sales $1,075; credit Accounts Receivable $1,075; credit Cost of Goods Sold $800. 
E)  Debit Accounts Receivable $1,075; debit Selling expense $800; credit Sales $1,075; credit Cost of Goods Sold $800. 
A)  Debit Accounts Receivable $1,075; credit Sales $1,075; debit Cost of Goods Sold $800; credit Finished Goods Inventory $800. 
B)  Debit Accounts Receivable $1,075; credit Sales $275; credit Finished Goods Inventory $800. 
C)  Debit Cost of Goods Sold $1,075; credit Sales $1,075. 
D)  Debit Finished Goods Inventory $800; debit Sales $1,075; credit Accounts Receivable $1,075; credit Cost of Goods Sold $800. 
E)  Debit Accounts Receivable $1,075; debit Selling expense $800; credit Sales $1,075; credit Cost of Goods Sold $800.

Question 5

Hybrid costing systems can only be applied to manufacturing.

Accepted Answer

A) True 
 B)False

Question 6

In a process costing system, the purchase of raw materials is credited to the Raw Materials Inventory.

Accepted Answer

A) True 
 B)False

Question 7

Luker Corporation uses a process costing system. The company had $160,500 of beginning Finished Goods Inventory on October 1. It transferred in $837,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $158,200. The entry to account for the cost of goods manufactured during October is:

Accepted Answer

A)  Debit Cost of Goods Sold $837,000; credit Finished Goods Inventory $837,000. 
B)  Debit Cost of Goods Sold $839,300; credit Work in Process Inventory $839,300. 
C)  Debit Finished Goods Inventory $837,000; credit Work in Process Inventory $837,000. 
D)  Debit Finished Goods Inventory $158,200; credit Cost of Goods Sold $158,200. 
E)  Debit Cost of Goods Sold $839,300; credit Finished Goods Inventory $839,300. 
A)  Debit Cost of Goods Sold $837,000; credit Finished Goods Inventory $837,000. 
B)  Debit Cost of Goods Sold $839,300; credit Work in Process Inventory $839,300. 
C)  Debit Finished Goods Inventory $837,000; credit Work in Process Inventory $837,000. 
D)  Debit Finished Goods Inventory $158,200; credit Cost of Goods Sold $158,200. 
E)  Debit Cost of Goods Sold $839,300; credit Finished Goods Inventory $839,300.

Question 8

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department.   The total materials costs transferred out of the Canning Department equals:

Accepted Answer

A)  $135,500. 
B)  $136,000. 
C)  $176,500. 
D)  $176,150. 
E)  $196,000. 
A)  $135,500. 
B)  $136,000. 
C)  $176,500. 
D)  $176,150. 
E)  $196,000.

Question 9

A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Work in Process Inventory account at the beginning of the period.

Accepted Answer

A) True 
 B)False

Question 10

The purchase of raw materials on account in a process costing system is recorded with a:

Accepted Answer

A)  Debit to Purchases and credit to Cash. 
B)  Debit to Purchases and a credit to Accounts Payable. 
C)  Debit to Raw Materials Inventory and a credit to Accounts Payable. 
D)  Debit to Accounts Payable and a credit to Raw Materials Inventory. 
E)  Debit to Work in Process Inventory and a credit to Accounts Payable. 
A)  Debit to Purchases and credit to Cash. 
B)  Debit to Purchases and a credit to Accounts Payable. 
C)  Debit to Raw Materials Inventory and a credit to Accounts Payable. 
D)  Debit to Accounts Payable and a credit to Raw Materials Inventory. 
E)  Debit to Work in Process Inventory and a credit to Accounts Payable.

Question 11

Sparky Corporation uses the weighted-average 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)  $1.74 
B)  $2.00 
C)  $2.36 
D)  $2.05 
E)  $2.61 
A)  $1.74 
B)  $2.00 
C)  $2.36 
D)  $2.05 
E)  $2.61

Question 12

If a department that applies process costing starts the reporting period with 40,000 physical units that were 80% complete with respect to direct materials and 50% complete with respect to direct labor, it must add 8,000 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them.

Accepted Answer

A) True 
 B)False

Question 13

A process cost summary usually does not include the number of equivalent units of production for the period.

Accepted Answer

A) True 
 B)False

Question 14

In a process operation, all labor that is used exclusively by a single production department is considered to be direct labor.

Accepted Answer

A) True 
 B)False

Question 15

The following is an account for a production department, showing its costs for one month:   Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the started and completed units cost $41,850, what was the cost of completing the units in the beginning Work in Process inventory?

Accepted Answer

A)  $12,150. 
B)  $2,160. 
C)  $7,560. 
D)  $54,000. 
E)  $37,260. 
A)  $12,150. 
B)  $2,160. 
C)  $7,560. 
D)  $54,000. 
E)  $37,260.

Question 16

Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows. Work in Process, May 1 (50,000 units, 100% complete for direct materials, 40% complete with respect to conversion costs; includes $70,500 of direct material cost; $34,050 of conversion costs).
  Work in Process, May 31 (75,000 units, 100% complete for direct materials; 20% complete for conversion costs).
  If Pitt Enterprises uses the FIFO method of process costing, compute the equivalent units for direct materials and conversion respectively for May.

Accepted Answer

A)  225,000 materials; 195,000 conversion. 
B)  275,000 materials; 215,000 conversion. 
C)  150,000 materials; 150,000 conversion. 
D)  195,000 materials; 225,000 conversion. 
E)  195,000 materials; 195,000 conversion. 
A)  225,000 materials; 195,000 conversion. 
B)  275,000 materials; 215,000 conversion. 
C)  150,000 materials; 150,000 conversion. 
D)  195,000 materials; 225,000 conversion. 
E)  195,000 materials; 195,000 conversion.

Question 17

Richards Corporation uses the weighted-average 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 18

A production department's output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 10,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. There were 1,000 units in beginning Work in Process inventory, and they were 70% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

Accepted Answer

A)  10,000 units. 
B)  10,300 units. 
C)  15,000 units. 
D)  15,300 units. 
E)  10,700 units. 
A)  10,000 units. 
B)  10,300 units. 
C)  15,000 units. 
D)  15,300 units. 
E)  10,700 units.

Question 19

At the beginning of the recent period, there were 900 units of product in a department, 35% completed. These units were finished and an additional 5,000 units were started and completed during the period. 800 units were still in process at the end of the period, 25% completed. Using the weighted average method, the equivalent units produced by the department were:

Accepted Answer

A)  5,000 units. 
B)  5,900 units. 
C)  6,100 units. 
D)  5,500 units. 
E)  6,700 units. 
A)  5,000 units. 
B)  5,900 units. 
C)  6,100 units. 
D)  5,500 units. 
E)  6,700 units.

Question 20

A company's beginning Work in Process inventory consisted of 20,000 units that were 80% complete with respect to direct labor. A total of 90,000 were finished during the period and 25,000 remaining in Work in Process inventory were 40% complete with respect to direct labor at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

Accepted Answer

A)  46,000. 
B)  100,000. 
C)  76,000. 
D)  90,000. 
E)  116,000. 
A)  46,000. 
B)  100,000. 
C)  76,000. 
D)  90,000. 
E)  116,000.

Which of the following is not one of the four steps in accounting for production activity and assigning costs during a period under a process cost system?

What are the four steps in accounting for production activity in a period?

Wyman Corporation uses a process costing system. The company manufactured certain goods at a cost of $800 and sold them on credit to Percy Corporation for $1,075. The complete journal entry to be made by Wyman at the time of this sale is:

Hybrid costing systems can only be applied to manufacturing.

In a process costing system, the purchase of raw materials is credited to the Raw Materials Inventory.

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. The total materials costs transferred out of the Canning Department equals:

A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Work in Process Inventory account at the beginning of the period.

The purchase of raw materials on account in a process costing system is recorded with a:

A process cost summary usually does not include the number of equivalent units of production for the period.

In a process operation, all labor that is used exclusively by a single production department is considered to be direct labor.

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

Which of the following is not one of the four steps in accounting for production activity and assigning costs during a period under a process cost system?

What are the four steps in accounting for production activity in a period?

Wyman Corporation uses a process costing system. The company manufactured certain goods at a cost of $800 and sold them on credit to Percy Corporation for $1,075. The complete journal entry to be made by Wyman at the time of this sale is:

Hybrid costing systems can only be applied to manufacturing.

In a process costing system, the purchase of raw materials is credited to the Raw Materials Inventory.

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. The total materials costs transferred out of the Canning Department equals:

A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Work in Process Inventory account at the beginning of the period.

The purchase of raw materials on account in a process costing system is recorded with a:

A process cost summary usually does not include the number of equivalent units of production for the period.

In a process operation, all labor that is used exclusively by a single production department is considered to be direct labor.

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