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

Payment of cash for production workers' wages is:

Indicate whether each of the following statements about process costing systems is true or false. A company that uses a process costing system may use separate predetermined overhead rates for each department involved in production.______ Company X completed 10,000 units of a product in January and had 1,000 units (80% completed)at the end of the month.Company X's equivalent units for January were 10,800.______ The reason for calculating the number of equivalent units for a period is to allocate product costs between work in process inventory and the cost of units completed and transferred out.______ A company that uses a process costing system completes a job cost sheet for each department each month.______ The transfer of goods from one processing department to another is an asset use transaction.______

Indicate whether each of the following statements about job-order costing systems is true or false. In a job-order costing system,the costs of a job are accumulated on a job cost sheet.______ Materials requisition forms are prepared by the company's purchasing department to order raw materials from a supplier.______ A materials requisition form is a source document used in preparing a job cost sheet.______ A materials requisition form is usually prepared and delivered electronically.______ A manufacturer's production department is responsible for preparing job cost sheets.______

Select the incorrect statement regarding the cost of production report.

Under process costing,a cost of production report is prepared to determine the amount of costs that should be transferred to the next department or to finished goods.

Select the incorrect statement regarding the recognition of depreciation on manufacturing equipment.

The Work in Process account for Chambers Company contained the following entries: Debit of $80,000 for direct raw materials Debit of $120,000 for direct labor Debit of $60,000 for manufacturing overhead Ending balance,$84,000,associated with Job #2 The company uses a job-order costing system.Work was only performed on two jobs during the period.The beginning balance in Work in Process was zero.What was the cost of Job #1,which was started and completed during the period?

A hybrid costing system is one that combines features of both process and job-order costing systems.