Question 1

A hybrid costing system contains:

Accepted Answer

A)  Features of a job-order costing system. 
B)  Features of a process costing system. 
C)  Features of both variable and absorption costing systems. 
D)  Features of both job-order and process costing systems. 
A)  Features of a job-order costing system. 
B)  Features of a process costing system. 
C)  Features of both variable and absorption costing systems. 
D)  Features of both job-order and process costing systems.

Question 2

Wetzel Manufacturing Company has two departments,assembly and finishing.The following data for the Assembly Department for June Year 2 is provided:
 $\begin{array}{|l|r|r|c|c|c|}
\hline&&\% &\text { Direct }&\text { Direct }\
&\text { Units }&\text { Complete}&\text {  Material }&\text { Labor }&\text { Overhead}&\text {  Total }\
\hline \text { Beginning work in process } & 500 & 75 \% &&&&\$9.500\
\hline \text { Started during the month } & 1,500 & \
\hline \text { Completed during the month } & 1,750 & \
\hline \text { Ending work in process } & 250 & 40 \% \
\hline \text { Costs added during month } & &&\$18.276&\$7.620&\$4.564&\$30.460 \
\hline
\end{array}$

Required:
1)Prepare a cost of production report for the Assembly Department.Wetzel uses the weighted-average method to determine equivalent units.
2)How much cost should be transferred to the Finishing Department?

Accepted Answer

1)Cost of production

Question 3

Drummond Company provides customized computer training to employees of large corporations.What kind of costing system should Drummond use?

Accepted Answer

A)  Standard costing 
B)  Process costing 
C)  Job-order costing 
D)  None of these answers are correct. 
A)  Standard costing 
B)  Process costing 
C)  Job-order costing 
D)  None of these answers are correct.

Question 4

If overhead was overapplied during the accounting period by an insignificant amount,the entry to close the Manufacturing Overhead account will include a:

Accepted Answer

A)  Debit to Cost of Goods Sold and a credit to Manufacturing Overhead. 
B)  Debit to Cost of Goods Sold and a credit to Finished Goods Inventory. 
C)  Debit to Manufacturing Overhead and a credit to Cost of Goods Sold. 
D)  Debit to Finished Goods Inventory and a credit to Manufacturing Overhead. 
A)  Debit to Cost of Goods Sold and a credit to Manufacturing Overhead. 
B)  Debit to Cost of Goods Sold and a credit to Finished Goods Inventory. 
C)  Debit to Manufacturing Overhead and a credit to Cost of Goods Sold. 
D)  Debit to Finished Goods Inventory and a credit to Manufacturing Overhead.

Question 5

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare used $1,200 of direct raw materials for Job #132.The recognition of this event would reflect an increase in which of the following accounts?

Accepted Answer

A)  Work in Process Inventory 
B)  Finished Goods Inventory 
C)  Raw Materials Inventory 
D)  Cost of Goods Sold 
A)  Work in Process Inventory 
B)  Finished Goods Inventory 
C)  Raw Materials Inventory 
D)  Cost of Goods Sold

Question 6

The purchase of raw materials on account is:

Accepted Answer

A)  An asset use transaction. 
B)  An asset exchange transaction. 
C)  An asset source transaction. 
D)  A claims exchange transaction. 
A)  An asset use transaction. 
B)  An asset exchange transaction. 
C)  An asset source transaction. 
D)  A claims exchange transaction.

Question 7

Select the correct formula for computing equivalent units for the period under the weighted average approach.

Accepted Answer

A)  Equivalent units = Units transferred 
B)  Equivalent units = Units transferred + (Ending inventory units × Percentage complete) 
C)  Equivalent units = Units transferred + Ending inventory units 
D)  Equivalent units = (Units transferred + Ending inventory units) × Percentage complete 
A)  Equivalent units = Units transferred 
B)  Equivalent units = Units transferred + (Ending inventory units × Percentage complete) 
C)  Equivalent units = Units transferred + Ending inventory units 
D)  Equivalent units = (Units transferred + Ending inventory units) × Percentage complete

Question 8

Indicate whether each of the following statements about product costing systems is true or false.
The type of product made by a manufacturer affects the type of accounting system that it should use to calculate the costs of its products.______
Hybrid costing systems are used by service businesses,but not manufacturing companies.______
A company that manufactures high-volume industrial chemicals such as sulfuric acid would use a job-order costing system.______
An automobile repair shop would use a job-order costing system to assign costs to individual jobs.______
Only process costing systems require averaging in assigning costs to products.______

Accepted Answer

The type of product made by a manufactur

Question 9

At the time indirect materials are issued to production,the balance in the:

Accepted Answer

A)  Manufacturing Overhead account will decrease. 
B)  Work in Process Inventory account will increase. 
C)  Raw Materials Inventory account will increase. 
D)  Manufacturing Overhead account will increase. 
A)  Manufacturing Overhead account will decrease. 
B)  Work in Process Inventory account will increase. 
C)  Raw Materials Inventory account will increase. 
D)  Manufacturing Overhead account will increase.

Question 10

A process costing system uses just two inventory accounts,Raw Materials Inventory and Work in Process Inventory.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not a component of process costing systems?

Accepted Answer

A)  Multiple Work in Process accounts. 
B)  Cost of production report. 
C)  Job cost sheet. 
D)  None of these answers are correct. 
A)  Multiple Work in Process accounts. 
B)  Cost of production report. 
C)  Job cost sheet. 
D)  None of these answers are correct.

Question 12

Garst Manufacturing is working on two jobs.Cost is accumulated under a job-order costing system,and overhead is applied on the basis of direct labor hours.The company estimated that overhead would be $64,000 and 10,000 direct labor hours would be worked.Both projects were started and completed in the current accounting period.The following transactions were completed during the period: (a)Used $10,000 of direct material on Project I and $6,800 of direct material on Project II.
(b)Labor costs for the two jobs amounted to the following: Project I,$24,000 (2,000 hours); Project II,$44,000 (6,000 hours).
(c)Project II was sold during the period for $120,000.
The ending balance in Work in Process was:

Accepted Answer

A)  $34,000. 
B)  $0. 
C)  $46,800. 
D)  $136,000. 
A)  $34,000. 
B)  $0. 
C)  $46,800. 
D)  $136,000.

Question 13

During the current accounting period,O'Hare Company paid $2,300 for selling and administrative expenses.Payment of cash for selling and administrative expenses is:

Accepted Answer

A)  An asset exchange transaction. 
B)  An asset source transaction. 
C)  An asset use transaction. 
D)  A claims exchange transaction. 
A)  An asset exchange transaction. 
B)  An asset source transaction. 
C)  An asset use transaction. 
D)  A claims exchange transaction.

Question 14

The Neptune Corporation uses a process costing system and the weighted average method.The company started March with 2,300 units in work in process-Dept.A.During the month 4,000 units were started.At the end of the month there were 3,200 units in ending work in process-Dept.A inventory that were 30% complete.The beginning work in process balance was $120,270 and total manufacturing cost for the period was $304,000.Based on this information,the amount of cost transferred from work in process-Dept.A to work in process-Dept.B was: (Do not round intermediate calculations.)

Accepted Answer

A)  $323,950. 
B)  $127,281. 
C)  $271,667. 
D)  $100,320. 
A)  $323,950. 
B)  $127,281. 
C)  $271,667. 
D)  $100,320.

Question 15

In April,the Assembly Department's beginning work in process was 10,000 units.During the month,40,000 units were transferred to the Finishing Department.The Assembly Department had 20,000 units that were 60% complete in its ending work in process.The Finishing Department had zero beginning inventory in April.The Assembly Department's total product costs for April were $260,000.
Required:
(A)Calculate the number of equivalent units for the Assembly Department using the weighted average method.
(B)Calculate the cost per equivalent unit.
(C)Determine the cost of the goods transferred to the Finishing Department.
(D)Determine the cost of the Assembly Department's ending work in process.

Accepted Answer

(A)40,000 + (20,000 × 60%)= 52,000 equiv

Question 16

Oregon Company started the month of August with 4,000 units in beginning work in process; these units were 60% complete on August 1.During the month,16,000 units were completed and transferred to finished goods.The ending work in process was 2,000 units that were 20% complete.
Required:
Calculate Oregon's equivalent units for the month of August using the weighted average method.

Accepted Answer

Equivalent units = 1

Question 17

A laundry detergent manufacturer would most likely use:

Accepted Answer

A)  Process costing. 
B)  Job-order costing. 
C)  Hybrid costing. 
D)  Batch-order costing. 
A)  Process costing. 
B)  Job-order costing. 
C)  Hybrid costing. 
D)  Batch-order costing.

Question 18

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare paid $700 for equipment rental and other indirect costs.The recognition of this event would:

Accepted Answer

A)  Decrease total assets. 
B)  Increase total assets. 
C)  Reduce net income. 
D)  Have no impact on total assets. 
A)  Decrease total assets. 
B)  Increase total assets. 
C)  Reduce net income. 
D)  Have no impact on total assets.

Question 19

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare transferred total product costs for Job #132 to finished goods.The recognition of this event would:

Accepted Answer

A)  Increase total assets. 
B)  Decrease total assets. 
C)  Reduce net income. 
D)  Have no impact on total assets. 
A)  Increase total assets. 
B)  Decrease total assets. 
C)  Reduce net income. 
D)  Have no impact on total assets.

Question 20

A process costing system would be appropriate for all of the following except:

Accepted Answer

A)  Production of gasoline. 
B)  Manufacture of smartphones. 
C)  Services provided by a public accounting firm. 
D)  Manufacture of granola bars. 
A)  Production of gasoline. 
B)  Manufacture of smartphones. 
C)  Services provided by a public accounting firm. 
D)  Manufacture of granola bars.

A hybrid costing system contains:

Drummond Company provides customized computer training to employees of large corporations.What kind of costing system should Drummond use?

If overhead was overapplied during the accounting period by an insignificant amount,the entry to close the Manufacturing Overhead account will include a:

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare used $1,200 of direct raw materials for Job #132.The recognition of this event would reflect an increase in which of the following accounts?

The purchase of raw materials on account is:

Select the correct formula for computing equivalent units for the period under the weighted average approach.

At the time indirect materials are issued to production,the balance in the:

A process costing system uses just two inventory accounts,Raw Materials Inventory and Work in Process Inventory.

Which of the following is not a component of process costing systems?

During the current accounting period,O'Hare Company paid $2,300 for selling and administrative expenses.Payment of cash for selling and administrative expenses is:

A laundry detergent manufacturer would most likely use:

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare paid $700 for equipment rental and other indirect costs.The recognition of this event would:

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare transferred total product costs for Job #132 to finished goods.The recognition of this event would:

A process costing system would be appropriate for all of the following except:

Management Accounting and Corporate Governance

Cost Behavior, operating Leverage, and Profitability Analysis

Analysis of Cost, volume, and Pricing to Increase Profitability

Cost Accumulation,tracing,and Allocation

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Financial Statement Analysis

Statement of Cash Flows

Filters

Exam 12: Job-Order, process, and Hybrid Costing Systems

A hybrid costing system contains:

Drummond Company provides customized computer training to employees of large corporations.What kind of costing system should Drummond use?

If overhead was overapplied during the accounting period by an insignificant amount,the entry to close the Manufacturing Overhead account will include a:

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare used $1,200 of direct raw materials for Job #132.The recognition of this event would reflect an increase in which of the following accounts?

The purchase of raw materials on account is:

Select the correct formula for computing equivalent units for the period under the weighted average approach.

At the time indirect materials are issued to production,the balance in the:

A process costing system uses just two inventory accounts,Raw Materials Inventory and Work in Process Inventory.

Which of the following is not a component of process costing systems?

During the current accounting period,O'Hare Company paid $2,300 for selling and administrative expenses.Payment of cash for selling and administrative expenses is:

A laundry detergent manufacturer would most likely use:

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare paid $700 for equipment rental and other indirect costs.The recognition of this event would:

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare transferred total product costs for Job #132 to finished goods.The recognition of this event would:

A process costing system would be appropriate for all of the following except:

Management Accounting and Corporate Governance

Cost Behavior, operating Leverage, and Profitability Analysis

Analysis of Cost, volume, and Pricing to Increase Profitability

Cost Accumulation,tracing,and Allocation

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Financial Statement Analysis

Statement of Cash Flows

Filters