Question 1

In a process costing system,direct material costs incurred are recorded:

Accepted Answer

A) Indirectly to a Work in Process Inventory account from Factory Overhead. 
B) Indirectly to a Finished Goods Inventory account from Factory Overhead. 
C) Directly to a Work in Process Inventory account. 
D) Directly to a Finished Goods Inventory account. 
E) Directly to a Cost of Goods Sold account. 
A) Indirectly to a Work in Process Inventory account from Factory Overhead. 
B) Indirectly to a Finished Goods Inventory account from Factory Overhead. 
C) Directly to a Work in Process Inventory account. 
D) Directly to a Finished Goods Inventory account. 
E) Directly to a Cost of Goods Sold account.

Question 2

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 3

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 4

Materials and labor costs that are clearly associated with a specific process or department are known as ________.Those costs that are not clearly associated with a specific process or department are called ________.

Accepted Answer

direct costs; indire

Question 5

Briefly explain the conditions under which job order cost accounting systems and process costing systems are commonly applied.

Accepted Answer

Job order cost accounting systems are co

Question 6

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) $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 7

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 equivalent units of conversion.

Accepted Answer

A) 165,000 
B) 130,250 
C) 140,000 
D) 144,000 
E) 110,000 
A) 165,000 
B) 130,250 
C) 140,000 
D) 144,000 
E) 110,000

Question 8

A company uses a process costing system and the weighted average method for inventory costs.The following information is available regarding conversion activities for the current year:

Accepted Answer

The answer of A company uses a process costing system...

Question 9

A company uses a process costing system.Its Assembly Department's beginning inventory consisted of 30,000 units,75% complete with respect to direct labor and overhead.The department completed and transferred out 127,500 units this period.The ending inventory consists of 20,000 units that are 25% complete with respect to direct labor and overhead.All direct materials are added at the beginning of the process.The department incurred direct labor costs of $24,000 and overhead costs of $32,000 for the period.Assuming the weighted average method,the direct labor cost per equivalent unit (rounded to the nearest cent)is:

Accepted Answer

A) $0.14. 
B) $0.16. 
C) $0.18. 
D) $0.30. 
E) $0.37. 
A) $0.14. 
B) $0.16. 
C) $0.18. 
D) $0.30. 
E) $0.37.

Question 10

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 11

When direct labor and overhead enter the production process at different rates,it is appropriate to use a conversion cost per equivalent unit.

Accepted Answer

A) True 
 B)False

Question 12

During December,the production department of a process operations system completed and transferred to finished goods a total of 65,000 units of product.At the end of March,15,000 additional units were in process in the production department and were 80% complete with respect to materials.The beginning inventory included materials cost of $57,500 and the production department incurred direct materials cost of $183,000 during December.Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

Accepted Answer

A) $3.70. 
B) $2.38. 
C) $2.82. 
D) $3.12. 
E) $4.79. 
A) $3.70. 
B) $2.38. 
C) $2.82. 
D) $3.12. 
E) $4.79.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

If the predetermined overhead allocation rate is 245% of direct labor cost,and the Baking Department's direct labor cost for the reporting period is $10,000,the following entry would be made to record the allocation of overhead to the products processed in this department:

Accepted Answer

A) True 
 B)False

Question 15

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 conversion.

Accepted Answer

A) $5.45 
B) $4.50 
C) $4.16 
D) $4.98 
E) $4.60 
A) $5.45 
B) $4.50 
C) $4.16 
D) $4.98 
E) $4.60

Question 16

The term "process costing system" refers to the number of trained individuals and computers required to process the collected cost information.

Accepted Answer

A) True 
 B)False

Question 17

In a process costing system costs are only measured upon completion of each job.

Accepted Answer

A) True 
 B)False

Question 18

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 19

The managers of process operations focus on the series of repetitive processes,or steps,resulting in a noncustomized product or service.

Accepted Answer

A) True 
 B)False

Question 20

If a process has ________ or ________ inventory of partially completed production,equivalent units must be calculated so that total costs incurred during the period are assigned to all units worked on.

Accepted Answer

beginning;

Exam 16: Process Costing and Analysis

In a process costing system,direct material costs incurred are recorded:

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:

Materials and labor costs that are clearly associated with a specific process or department are known as ________.Those costs that are not clearly associated with a specific process or department are called ________.

Briefly explain the conditions under which job order cost accounting systems and process costing systems are commonly applied.

A company uses a process costing system and the weighted average method for inventory costs.The following information is available regarding conversion activities for the current year:

Which of the following statements is most accurate?

When direct labor and overhead enter the production process at different rates,it is appropriate to use a conversion cost per equivalent unit.

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

If the predetermined overhead allocation rate is 245% of direct labor cost,and the Baking Department's direct labor cost for the reporting period is $10,000,the following entry would be made to record the allocation of overhead to the products processed in this department:

The term "process costing system" refers to the number of trained individuals and computers required to process the collected cost information.

In a process costing system costs are only measured upon completion of each job.

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

The managers of process operations focus on the series of repetitive processes,or steps,resulting in a noncustomized product or service.

If a process has ________ or ________ inventory of partially completed production,equivalent units must be calculated so that total costs incurred during the period are assigned to all units worked on.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and 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

Time Value of Money

Investments

Lean Principles and Accounting

Filters

Materials and labor costs that are clearly associated with a specific process or department are known as .Those costs that are not clearly associated with a specific process or department are called .

If a process has or inventory of partially completed production,equivalent units must be calculated so that total costs incurred during the period are assigned to all units worked on.