Question 1

Process and job order manufacturing operations both combine materials, labor, and overhead items in the process of producing products.

Accepted Answer

A) True 
 B)False  True

Question 2

If Department Q uses $60,000 of direct materials and Department T uses $15,000 of direct materials, the following journal entry would be recorded by the process cost accounting system:

Accepted Answer

A) True 
 B)False  True

Question 3

Why is the Process Cost Summary important to management and how does the Process Cost Summary accomplish its purposes?

Accepted Answer

The Process Cost Summary depicts a four-step process detailing physical flows and cost flows. It allows management to verify inputs and outputs as part of a cost control and monitoring system. It also lets management logically perform unit costing-a necessary activity to allow for appropriate product pricing. By detailing physical flow, a process cost summary measures accountability and responsibility. By detailing cost flow, it allows management to determine and derive appropriate cost allocations in a logical format.

Question 4

During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor. The production department incurred direct labor cost of $578,900 and its beginning inventory included labor cost of $54,700. Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

Accepted Answer

A)  $4.69. 
B)  $3.84. 
C)  $4.86. 
D)  $4.28. 
E)  $4.40. 
A)  $4.69. 
B)  $3.84. 
C)  $4.86. 
D)  $4.28. 
E)  $4.40.

Question 5

Medina Corp. uses the weighted average method for inventory costs and had the following information available for the year. Equivalent units of production for the year are:

Accepted Answer

A)  3,200 units. 
B)  3,320 units. 
C)  3,240 units. 
D)  3,520 units. 
E)  3,800 units. 
A)  3,200 units. 
B)  3,320 units. 
C)  3,240 units. 
D)  3,520 units. 
E)  3,800 units.

Question 6

The following data is available for Osman Corp. for the current year:   Calculate the equivalent units of production for the year using the weighted average method.

Accepted Answer

The answer of The following data is available for Osman...

Question 7

Equivalent units of production are always the same as the total number of physical units finished during the period.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following characteristics applies to process cost accounting but not to job order cost accounting?

Accepted Answer

A)  Use of a predetermined overhead rate. 
B)  Identifiable lots of production. 
C)  Equivalent units of production. 
D)  Labor time ticket for each employee. 
E)  Use of a single Goods in Process Inventory account. 
A)  Use of a predetermined overhead rate. 
B)  Identifiable lots of production. 
C)  Equivalent units of production. 
D)  Labor time ticket for each employee. 
E)  Use of a single Goods in Process Inventory account.

Question 9

If the predetermined overhead allocation rate is 225% of direct labor cost, and the Mixing 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 10

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

Accepted Answer

Accounting for a department's activity f

Question 11

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

Accepted Answer

When raw materials are purchased they ar

Question 12

A process cost summary shows the cost of a particular job manufactured in the reporting period.

Accepted Answer

A) True 
 B)False

Question 13

A process cost summary is a managerial accounting report that describes:

Accepted Answer

A)  The costs charged to a department. 
B)  The equivalent units of production by the department. 
C)  How the costs were assigned to the output. 
D)  Physical transfers for a department. 
E)  All of these. 
A)  The costs charged to a department. 
B)  The equivalent units of production by the department. 
C)  How the costs were assigned to the output. 
D)  Physical transfers for a department. 
E)  All of these.

Question 14

Heesacker, Inc. uses a process cost accounting system. The following operating and cost data occurred during October:   Materials are added at the beginning of the process. Direct labor and overhead are incurred evenly throughout the process. Prepare the October process cost summary assuming the weighted average method of inventory costing.

Accepted Answer

The answer of Heesacker, Inc. uses a process cost accounting...

Question 15

Equivalent units of production is an engineering term used to describe the process by which one company attempts to manufacture units of a product that are equivalent to the product manufactured by a competitor.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

Goods in p

Question 17

In a process cost accounting system, factory overhead costs can be allocated to production departments by using a predetermined overhead allocation rate.

Accepted Answer

A) True 
 B)False

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 goods in process inventory. The units in ending goods in process inventory were 50% complete with respect to both direct materials and conversion costs. There were 1,000 units in beginning goods 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

The use of process costing is of little benefit to a service type of operation.

Accepted Answer

A) True 
 B)False

Question 20

Prepare the required general journal entry to record the following transactions for the Flaherty Company.
a. Incurred $95,000 of factory labor cost which is paid in cash.
b. Used $78,000 of direct labor in the production department.
c. Used $17,000 of indirect labor.

Accepted Answer

The answer of Prepare the required general journal entry to...

Exam 20: Process Cost Accounting

Process and job order manufacturing operations both combine materials, labor, and overhead items in the process of producing products.

If Department Q uses $60,000 of direct materials and Department T uses $15,000 of direct materials, the following journal entry would be recorded by the process cost accounting system:

Why is the Process Cost Summary important to management and how does the Process Cost Summary accomplish its purposes?

Medina Corp. uses the weighted average method for inventory costs and had the following information available for the year. Equivalent units of production for the year are:

The following data is available for Osman Corp. for the current year: Calculate the equivalent units of production for the year using the weighted average method.

Equivalent units of production are always the same as the total number of physical units finished during the period.

Which of the following characteristics applies to process cost accounting but not to job order cost accounting?

If the predetermined overhead allocation rate is 225% of direct labor cost, and the Mixing 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:

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

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

A process cost summary shows the cost of a particular job manufactured in the reporting period.

A process cost summary is a managerial accounting report that describes:

Equivalent units of production is an engineering term used to describe the process by which one company attempts to manufacture units of a product that are equivalent to the product manufactured by a competitor.

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

In a process cost accounting system, factory overhead costs can be allocated to production departments by using a predetermined overhead allocation rate.

The use of process costing is of little benefit to a service type of operation.

Prepare the required general journal entry to record the following transactions for the Flaherty Company. a. Incurred $95,000 of factory labor cost which is paid in cash. b. Used $78,000 of direct labor in the production department. c. Used $17,000 of indirect labor.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

Filters

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