Question 1

Process costing systems consider overhead costs to include those costs that cannot be tied to individual processes.

Accepted Answer

A) True 
 B)False

Question 2

During March, the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. 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 conversion. Compute the number of equivalent units with respect to both materials and conversion respectively for March using the weighted-average method.

Accepted Answer

A)  165,000 materials; 165,000 conversion. 
B)  135,000 materials; 119,000 conversion. 
C)  140,000 materials; 130,250 conversion. 
D)  165,000 materials; 144,000 conversion. 
E)  144,000 materials; 144,000 conversion. 
A)  165,000 materials; 165,000 conversion. 
B)  135,000 materials; 119,000 conversion. 
C)  140,000 materials; 130,250 conversion. 
D)  165,000 materials; 144,000 conversion. 
E)  144,000 materials; 144,000 conversion.

Question 3

A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Work in Process Inventory account at the beginning of the period.

Accepted Answer

A) True 
 B)False

Question 4

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department.   If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the direct materials?

Accepted Answer

A)  Work in Process-Labeling $135,500; Work in Process-Canning $135,500. 
B)  Work in Process-Labeling $176,500; Work in Process-Canning $176,500. 
C)  Finished Goods-Labeling $135,500; Finished Goods-Canning $135,500. 
D)  Work in Process-Labeling $176,500; Finished Goods-Canning $176,500. 
E)  Finished Goods $136,000; Work in Process $136,000. 
A)  Work in Process-Labeling $135,500; Work in Process-Canning $135,500. 
B)  Work in Process-Labeling $176,500; Work in Process-Canning $176,500. 
C)  Finished Goods-Labeling $135,500; Finished Goods-Canning $135,500. 
D)  Work in Process-Labeling $176,500; Finished Goods-Canning $176,500. 
E)  Finished Goods $136,000; Work in Process $136,000.

Question 5

Process costing systems are used only by companies that manufacture physical products; companies that provide services do not use process costing.

Accepted Answer

A) True 
 B)False

Question 6

Job order costing and process costing are two major costing systems used in manufacturing. Briefly contrast the characteristics of these two systems.

Accepted Answer

Job Order System Process System
Custom o

Question 7

Hybrid costing systems can only be applied to manufacturing.

Accepted Answer

A) True 
 B)False

Question 8

In process costing, a ________ is used to apply factory overhead.

Accepted Answer

The answer of In process costing, a ________ is used...

Question 9

A production department's output for the most recent month consisted of 8,000 units completed and transferred to the next stage of production and 5,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% 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)  6,500 units. 
B)  9,000 units. 
C)  13,000 units. 
D)  5,500 units. 
E)  10,500 units. 
A)  6,500 units. 
B)  9,000 units. 
C)  13,000 units. 
D)  5,500 units. 
E)  10,500 units.

Question 10

Luker Corporation uses a process costing system. The company had $160,500 of beginning Finished Goods Inventory on October 1. It transferred in $837,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $158,200. The entry to account for the cost of goods manufactured during October is:

Accepted Answer

A)  Debit Cost of Goods Sold $837,000; credit Finished Goods Inventory $837,000. 
B)  Debit Cost of Goods Sold $839,300; credit Work in Process Inventory $839,300. 
C)  Debit Finished Goods Inventory $837,000; credit Work in Process Inventory $837,000. 
D)  Debit Finished Goods Inventory $158,200; credit Cost of Goods Sold $158,200. 
E)  Debit Cost of Goods Sold $839,300; credit Finished Goods Inventory $839,300. 
A)  Debit Cost of Goods Sold $837,000; credit Finished Goods Inventory $837,000. 
B)  Debit Cost of Goods Sold $839,300; credit Work in Process Inventory $839,300. 
C)  Debit Finished Goods Inventory $837,000; credit Work in Process Inventory $837,000. 
D)  Debit Finished Goods Inventory $158,200; credit Cost of Goods Sold $158,200. 
E)  Debit Cost of Goods Sold $839,300; credit Finished Goods Inventory $839,300.

Question 11

Which of the following products is most likely to be produced in a process operation?

Accepted Answer

A)  Airplanes 
B)  Cereal 
C)  Bridges 
D)  Designer bridal gowns 
E)  Custom cabinets 
A)  Airplanes 
B)  Cereal 
C)  Bridges 
D)  Designer bridal gowns 
E)  Custom cabinets

Question 12

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 13

Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing Department:   The cost per equivalent unit of production for direct materials is:

Accepted Answer

A)  $9.26 
B)  $4.21 
C)  $4.97 
D)  $5.05 
E)  $5.85 
A)  $9.26 
B)  $4.21 
C)  $4.97 
D)  $5.05 
E)  $5.85

Question 14

Port Manufacturing Company uses a process costing system. Materials are added at the beginning of the process. Direct labor and overhead are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing. The following are the operating and cost data information for October.
The October 1 beginning Work in Process Inventory consisted of 20,000 units. The costs for this inventory are $82,500 of direct materials, $24,400 of direct labor, and $48,800 of factory overhead. Factory overhead is applied at 200% of direct labor cost.
In addition to the beginning inventory costs, the company issued the following costs into Work in Process Inventory; direct materials, $240,000; direct labor, $68,000; factory overhead, $136,000.
During October, the company completed and transferred 60,000 units of its product to finished goods. At the end of the month, the Work in Process inventory consisted of 15,000 units that were 40% complete with respect to direct labor and factory overhead and 100% complete with respect to materials.
Prepare the company's process cost summary for October using the weighted average method.

Accepted Answer

Port Manufacturing Company
Process Cost

Question 15

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 16

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

Accepted Answer

A) True 
 B)False

Question 17

In a process costing accounting system, factory wages are debited to ________, when direct labor is used. When indirect labor is used, the ________ account is debited. In both cases the ________ is credited.

Accepted Answer

Work in Process; Fac

Question 18

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 19

Wilturner Company incurs $82,000 of labor related directly to the product in the Assembly Department, $31,000 of labor related to the Assembly Department as a whole, and $18,000 of labor for services that help production in both the Assembly and Finishing departments. The journal entries to record the labor for the Assembly Department would include:

Accepted Answer

A)  Debit Work in Process Inventory $82,000; debit Factory Overhead $49,000. 
B)  Debit Work in Process Inventory $82,000; debit Wages Expense $49,000. 
C)  Debit Work in Process Inventory $113,000; debit Wages Expense $18,000. 
D)  Debit Work in Process Inventory $131,000. 
E)  Debit Work in Process Inventory $113,000; debit Factory Overhead $18,000. 
A)  Debit Work in Process Inventory $82,000; debit Factory Overhead $49,000. 
B)  Debit Work in Process Inventory $82,000; debit Wages Expense $49,000. 
C)  Debit Work in Process Inventory $113,000; debit Wages Expense $18,000. 
D)  Debit Work in Process Inventory $131,000. 
E)  Debit Work in Process Inventory $113,000; debit Factory Overhead $18,000.

Question 20

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

Accepted Answer

Equivalent units of production refers to

Process costing systems consider overhead costs to include those costs that cannot be tied to individual processes.

A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Work in Process Inventory account at the beginning of the period.

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the direct materials?

Process costing systems are used only by companies that manufacture physical products; companies that provide services do not use process costing.

Job order costing and process costing are two major costing systems used in manufacturing. Briefly contrast the characteristics of these two systems.

Hybrid costing systems can only be applied to manufacturing.

In process costing, a ________ is used to apply factory overhead.

Which of the following products is most likely to be produced in a process operation?

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

Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing Department: The cost per equivalent unit of production for direct materials is:

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

In a process costing accounting system, factory wages are debited to , when direct labor is used. When indirect labor is used, the account is debited. In both cases the is credited.

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.

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

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

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

Accounting for Business Transactions

Filters

Exam 3: Process Costing and Analysis

Process costing systems consider overhead costs to include those costs that cannot be tied to individual processes.

A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Work in Process Inventory account at the beginning of the period.

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the direct materials?

Process costing systems are used only by companies that manufacture physical products; companies that provide services do not use process costing.

Job order costing and process costing are two major costing systems used in manufacturing. Briefly contrast the characteristics of these two systems.

Hybrid costing systems can only be applied to manufacturing.

In process costing, a ________ is used to apply factory overhead.

Which of the following products is most likely to be produced in a process operation?

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

Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing Department: The cost per equivalent unit of production for direct materials is:

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

In a process costing accounting system, factory wages are debited to ________, when direct labor is used. When indirect labor is used, the ________ account is debited. In both cases the ________ is credited.

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.

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

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

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

Accounting for Business Transactions

Filters

In a process costing accounting system, factory wages are debited to , when direct labor is used. When indirect labor is used, the account is debited. In both cases the is credited.