Exam 3: Process Costing and Analysis

Which of the following pair of journal entries correctly records the current month's activity where the company had $21,030 in total factory labor costs that were paid in cash with $16,200 of this total for direct labor?

In the same time period, it is possible that a production department can produce 1,000 equivalent finished units with respect to direct materials and 1,200 equivalent finished units with respect to direct labor.

A department had 12,500 units that were 20% complete in beginning Goods in Process Inventory.During the current period 60,000 units were transferred in.Ending Goods in Process Inventory was 15,000 units that were 70% complete.Assume this company uses the FIFO method of process costing and direct material is added uniformly throughout the process.What are the equivalent units produced with respect to direct material?

In process cost accounting, direct labor includes only the labor that is applied directly to the products.

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

In process costing there is never a balance remaining in Factory Overhead that needs to be closed at period end.

Factory overhead costs can be allocated by a process cost accounting system to the output of production departments by using a predetermined overhead allocation rate.

What is meant by equivalent units of production, and why are they important when a process cost accounting system is used?

If Department A uses $10,000 of direct materials and Department B uses $15,000 of direct materials, the following journal entry would be recorded by the process cost accounting system:

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

(a)Why is the Process Cost Summary important to management? (b)How does the Process Cost Summary accomplish its purposes?

In a manufacturing operation with two process departments (1 and 2), the flow of costs would proceed from Goods in Process, Dept #1 to ________________ to _______________ to ______________.

The following data are available for a company's manufacturing activities: Assume the company uses the weighted-average inventory method.If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively?

In a process cost accounting system, direct materials used are debited to the _________________ account, and indirect materials used are debited to the ______________________ account.

A department had 65 units which were 20% complete in beginning Goods in Process Inventory.During the current period, 77 units were transferred out.Ending Goods in Process Inventory was 30 units which were 20% complete.Using the weighted-average method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process?

Describe the flow of labor in a process cost accounting system, including accounts used.

A department had 600 units which were 40% complete in beginning Goods in Process Inventory.During the current period, 7,000 units were transferred out.Ending Goods in Process Inventory was 800 units which were 40% complete.Using the FIFO method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process?

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.

The following journal entry would be made to record the use of direct materials in the reporting period covered by the information:

Process cost accounting systems are used only by companies that manufacture physical products; companies and other organizations that provide services to their customers do not use process cost accounting.