Deck 5: Process Costing

Question 1

Direct costs:

A) usually include rent, utilities and general insurance in a multi-departmental company
B) cannot easily be traced to a specific process or product
C) are the costs that can easily be traced to a specific product
D) include supervisors with responsibility for more than one department

Answer 1

are the costs that can easily be traced to a specific product

Question 2

The cost of employees who only work in one process department is:

A) a transferred cost
B) a direct cost
C) a reclaimable cost
D) an indirect cost

Answer 2

a reclaimable cost

Question 3

The main concepts of process costing are completely different from the concepts used in job costing.

Answer 3

False

Question 4

A three-stage inventory system provides:

A) a way for manufacturing companies to record their work
B) a way for a service company to keep track of customers
C) just the work-in-process inventory
D) a full account of direct costs

Question 5

Together with the Manufacturing Overhead account, the three-stage inventory system will be used to track the costs that must be allocated to each job or process, including:

A) finished good only
B) direct materials, labor, and overheads
C) all direct costs with no overheads
D) direct materials only

Question 6

Cost assignment is a general term for assigning costs, whether direct or indirect, to a cost object.

Question 7

Most companies do not keep records of their indirect costs from previous years.

Question 8

How would companies determine the budgeted indirect-cost rate?

Question 9

Answer the following questions using the information below:
Dharma Plastics, Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.


-What is the unit cost per equivalent unit of beginning inventory in Department A?

A) $2,000
B) $7,000
C) $3,500
D) $7,500

Question 10

Dharma Plastics, Inc., manufactures plastic moldings for car seats. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.
What were the equivalent units of direct materials and conversion costs, respectively, at the end of February? Assume Dharma Plastics, Inc., uses the weighted-average process costing method.

A) 800; 700
B) 600; 500
C) 800; 800
D) 800; 730

Question 11

Answer the following questions using the information below:
The Cuckoo Clock Shop manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Cuckoo Clock Shop uses weighted-average costing.


-What are the equivalent units for direct materials and conversion costs, respectively, for June?

A) 1,050 units; 1,012.5 units
B) 962 units; 990 units
C) 1,050 units; 1,050 units
D) 1,200.5 units; 1,160.64 units

Question 12

Answer the following questions using the information below:
The Cuckoo Clock Shop manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Cuckoo Clock Shop uses weighted-average costing.


-What is the conversion cost per equivalent unit in June?

A) $865.10
B) $627.16
C) $789.57
D) $945.18

Question 13

Answer the following questions using the information below:
The Cuckoo Clock Shop manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Cuckoo Clock Shop uses weighted-average costing.


-What amount of conversion costs are assigned to the ending Work-in-Process account for June?

A) $70,555.50
B) $63,225.25
C) $90,074
D) $509,78.32

Question 14

Answer the following questions using the information below:
The Lebanon Tractor Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Lebanon Tractor uses weighted-average costing.


-What are the equivalent units for direct materials and conversion costs, respectively, for April?

A) 250 units; 125 units
B) 1,600 units; 1,475 units
C) 1,350 units; 1,350 units
D) 1,600 units; 1,600 units

Question 15

Answer the following questions using the information below:
The Lebanon Tractor Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Lebanon Tractor uses weighted-average costing.


-What is the direct materials cost per equivalent unit during April?

A) $575.00
B) $1,241.94
C) $1,250.00
D) $581.25

Question 16

Answer the following questions using the information below:
The Lebanon Tractor Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Lebanon Tractor uses weighted-average costing.


-What is the conversion cost per equivalent unit in April?

A) $945.76
B) $1,033.00
C) $872.50
D) $1,250.00

Question 17

Answer the following questions using the information below:
The Lebanon Tractor Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Lebanon Tractor uses weighted-average costing.


-What amount of conversion costs are assigned to the ending Work-in-Process account for April?

A) $236,440.00
B) $145,312.50
C) $250,000.00
D) $118,220.00

Question 18

Jeddah Chillers Company makes air conditioning units. Materials are added at the beginning of the process and conversion costs are uniformly incurred. At the beginning of September, work in process is 40% complete and at the end of the month it is 60% complete. Other data for the month include:
Required:
a. Prepare a production cost worksheet with supporting schedules using the weighted-average method of process costing.
b. Prepare journal entries to record transferring of materials to processing and from processing to finished goods.

Question 19

Ampco Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were for June 2014:
How many units must be accounted for during the period?

A) 225,000 units
B) 200,000 units
C) 150,000 units
D) 179,500 units