Question 1

In a process costing system, factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

Accepted Answer

A) True 
 B)False  False

Question 2

In process cost accounting, materials are always classified as indirect if they are not physically incorporated into the final product.

Accepted Answer

A) True 
 B)False  False

Question 3

One section of the process cost summary describes the equivalent units of production for the department during the reporting period and presents the calculations of the costs per equivalent unit.

Accepted Answer

A) True 
 B)False  True

Question 4

A process cost accounting system records all factory overhead costs directly in the Goods in Process Inventory accounts.

Accepted Answer

A) True 
 B)False

Question 5

Browning Company had 8,700 units in beginning inventory with accumulated costs for direct materials of $17,900, $16,500 direct labor, and $13,200 of overhead. During July, the company completed and transferred 50,000 units to finished goods. Costs incurred in the current period included $45,000 of direct materials, $58,500 of direct labor, and $46,800 of factory overhead. Ending inventory consisted of 12,000 units which were 80% complete with respect to materials and 50% complete with respect to labor and overhead. Compute the value assigned to ending inventory based on the weighted average method of inventory costing.

Accepted Answer

Materials EUP = 12,000 units x

Question 6

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 7

Equivalent units of production are equal to:

Accepted Answer

A)  The number of units that could have been completed if all effort had been applied to units that were started and completed during a period. 
B)  The number of finished units actually produced during a period. 
C)  The number of units introduced into the process during a period. 
D)  The number of units still in process at the end of a period. 
E)  Physical units that were started and completed during a period. 
A)  The number of units that could have been completed if all effort had been applied to units that were started and completed during a period. 
B)  The number of finished units actually produced during a period. 
C)  The number of units introduced into the process during a period. 
D)  The number of units still in process at the end of a period. 
E)  Physical units that were started and completed during a period.

Question 8

In process costing, indirect materials are charged directly to Goods in Process Inventory.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

Equivalent units of production measure p

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  Compact disks. 
B)  Slacks for casual wear. 
C)  Baseball hats. 
D)  Calculators. 
E)  Custom cabinets. 
A)  Compact disks. 
B)  Slacks for casual wear. 
C)  Baseball hats. 
D)  Calculators. 
E)  Custom cabinets.

Question 12

Process manufacturing usually reflects a manufacturer that produces large quantities of identical products.

Accepted Answer

A) True 
 B)False

Question 13

An equivalent unit of production is an estimate of efforts that is used to calculate the ______________ of each production component.

Accepted Answer

The answer of An equivalent unit of production is an...

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

The process cost summary presents calculations of the cost of units completed during the reporting period, but does not present any information about the ending goods in process inventory.

Accepted Answer

A) True 
 B)False

Question 16

Aniston Enterprises manufactures stylish hats for sophisticated women. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows. Goods in Process, May 1 (50,000 units, 100% complete for direct materials, 40% complete with respect to direct labor and overhead; includes $70,500 of direct material cost; $34,050 of conversion costs).
Goods in Process, May 31 (75,000 units, 100% complete for direct materials; 20% complete for conversion costs).
If Aniston Enterprises uses the FIFO method of process costing, compute the equivalent units for materials and conversion costs respectively for May.

Accepted Answer

A)  225,000; 225,000. 
B)  200,000; 195,000 
C)  275,000; 200,000 
D)  225,000; 195,000 
E)  200,000; 200,000 
A)  225,000; 225,000. 
B)  200,000; 195,000 
C)  275,000; 200,000 
D)  225,000; 195,000 
E)  200,000; 200,000

Question 17

Medina Corp. uses the weighted average method for inventory costs and had the following information available for the year. The number of units transferred to finished goods during the year is:

Accepted Answer

A)  3,200 units. 
B)  3,000 units. 
C)  3,400 units. 
D)  3,160 units. 
E)  3,500 units. 
A)  3,200 units. 
B)  3,000 units. 
C)  3,400 units. 
D)  3,160 units. 
E)  3,500 units.

Question 18

In a process cost accounting system, the purchase of raw materials is credited to the Raw Materials Inventory.

Accepted Answer

A) True 
 B)False

Question 19

Embark produces mulch for landscaping use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is:

Accepted Answer

A)  Debit Raw Materials Inventory $87,000; credit Accounts Payable $87,000. 
B)  Debit Raw Materials Inventory $87,000; credit Finished Goods Inventory $87,000. 
C)  Debit Cost of Goods Sold $87,000; credit Finished Goods Inventory $87,000. 
D)  Debit Goods in Process Inventory $87,000; credit Raw Materials Inventory $87,000. 
E)  Debit Goods in Process Inventory $87,000; credit Cost of Goods Sold $87,000. 
A)  Debit Raw Materials Inventory $87,000; credit Accounts Payable $87,000. 
B)  Debit Raw Materials Inventory $87,000; credit Finished Goods Inventory $87,000. 
C)  Debit Cost of Goods Sold $87,000; credit Finished Goods Inventory $87,000. 
D)  Debit Goods in Process Inventory $87,000; credit Raw Materials Inventory $87,000. 
E)  Debit Goods in Process Inventory $87,000; credit Cost of Goods Sold $87,000.

Question 20

Prepare journal entries to record the following production activities for Sherman Manufacturing.
a. Incurred $105,100 of factory labor cost which is paid in cash.
b. Used $93,900 of direct labor in the production department.
c. Used $11,200 of indirect labor.

Accepted Answer

The answer of Prepare journal entries to record the following...

Exam 20: Process Cost Accounting

In a process costing system, factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

In process cost accounting, materials are always classified as indirect if they are not physically incorporated into the final product.

One section of the process cost summary describes the equivalent units of production for the department during the reporting period and presents the calculations of the costs per equivalent unit.

A process cost accounting system records all factory overhead costs directly in the Goods in Process Inventory accounts.

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:

Equivalent units of production are equal to:

In process costing, indirect materials are charged directly to Goods in Process Inventory.

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

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

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

Process manufacturing usually reflects a manufacturer that produces large quantities of identical products.

An equivalent unit of production is an estimate of efforts that is used to calculate the ______________ of each production component.

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

The process cost summary presents calculations of the cost of units completed during the reporting period, but does not present any information about the ending goods in process inventory.

Medina Corp. uses the weighted average method for inventory costs and had the following information available for the year. The number of units transferred to finished goods during the year is:

In a process cost accounting system, the purchase of raw materials is credited to the Raw Materials Inventory.

Embark produces mulch for landscaping use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is:

Prepare journal entries to record the following production activities for Sherman Manufacturing. a. Incurred $105,100 of factory labor cost which is paid in cash. b. Used $93,900 of direct labor in the production department. c. Used $11,200 of indirect labor.

Accounting in Business

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Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

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Accounting Information Systems

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Accounting for Receivables

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

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Statement of Cash Flows

Analysis of Financial Statements

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