Deck 5: Process Costing

Question 1

Unique or custom-made goods use a job costing system.

Answer 1

True

Question 2

In process costing a separate work in process inventory account is maintained for each process.

Answer 2

True

Question 3

When units are moved from one processing department to the next,the cost associated with those units must also be moved from one WIP account to the next.These costs are called

A)transported costs.
B)transmitted costs.
C)conveyed costs.
D)transferred costs.

Answer 3

D

Question 4

Indirect labour would be a component of conversion costs.

Question 5

In a job cost system,all costs flow to a particular job.

Question 6

In process costing,the manufacturing costs assigned to the product must always follow the physical movement of the product.

Question 7

In process costing,the costs flow from Work in Process Inventory,to Raw Materials Inventory,to Finished Goods Inventory.

Question 8

Which of the following would use process costing?

A)Clear Channel advertising
B)PIP Printing
C)Pepsi
D)DBA Management Consultants

Question 9

The costs moved from one processing department to the next processing department are called "transported- out" costs in the first department and "transported-in" costs in the next department.

Question 10

Conversion costs are the sum of direct labour and manufacturing overhead.

Question 11

What are the two basic types of product costing systems?

A)Department and plant
B)FIFO and weighted-average
C)Job and process
D)Variable and process

Question 12

Both process and job costing assign costs to units as they proceed through the process.

Question 13

In a process costing system with a series of manufacturing processes,each manufacturing process will have a WIP inventory account.

Question 14

The product costing system normally used to assign costs to goods that are mass produced is

A)fixed costing.
B)job costing.
C)LIFO costing.
D)process costing.

Question 15

In process costing the cost for direct materials,direct labour and manufacturing overhead are assigned to each job.

Question 16

Conversion costs include direct labour and direct materials.

Question 17

To simplify the accounting,the journal entry to record the transfer of costs from one WIP account to the next WIP account is generally made once a month to reflect all physical transfers that occurred during the month.

Question 18

Process costing is most likely used in which of the following industries?

A)Aircraft
B)Chemicals
C)Construction
D)Printing

Question 19

Hallow Company produces ping-pong balls using a three-step sequential process that includes molding,colouring and finishing.When the balls are completely finished,out of which account should their cost be transferred?

A)Finished goods inventory
B)WIP inventory─finishing
C)WIP inventory─colouring
D)WIP inventory─molding

Question 20

Hallow Company produces ping-pong balls using a three-step sequential process that includes molding,colouring and finishing.At what stage would the Ping-Pong balls be allocated manufacturing overhead?

A)When the balls are in WIP inventory─molding
B)When the balls are in WIP inventory─finishing
C)When the balls are in WIP inventory─colouring
D)All of the above

Question 21

Sweet Stuff Bakery mass-produces cakes using three sequential processing departments: Mixing,Baking,and Packaging.The following transactions occurred during February:

Note: No direct materials were used by the Baking Department.
Required:
A.Post each of these transactions to the company's inventory T-accounts provided below.
B.Determine the balance at month end in each of the T-accounts.
C.Assume that 1,440,000 cakes were completed and transferred out of the Packaging Department during the month.What was the cost per unit of making each cake?

Question 22

Direct labour costs plus manufacturing overhead costs equal

A)prime costs.
B)operating costs.
C)equivalent costs.
D)conversion costs.

Question 23

If a company has 5,000 units that are 60% complete,the equivalent unit figure is 3,000.

Question 24

Equivalent units should be computed separately for direct materials and conversion costs.

Question 25

In a mass-production environment,direct labour is usually a relatively small component of the total manufacturing costs.

Question 26

In a process costing environment,direct labour and manufacturing overhead are usually combined into one cost category called "conversion cost."

Question 27

Autodig mass-produces a single product using three sequential processing departments: Machining,Assembly,and Packaging.The following transactions occurred during February:

Note: No direct materials were used by the Baking Department.
Required:
A.Post each of these transactions to the company's inventory T-accounts provided below.
B.Determine the balance at month end in each of the T-accounts.
C.Assume that 640,000 units were completed and transferred out of the Packaging Department during the month.What was the cost per unit of making each unit?

Question 28

Equivalent units are the sum of direct materials and direct labour.

Question 29

Conversion costs are generally added evenly throughout a process.

Question 30

A company manufactures exterior paint.Last month's costs were:

What were the conversion costs for the month?

A)$260,000
B)$395,000
C)$285,000
D)$110,000

Question 31

Sweet Stuff Bakery mass-produces cakes using three sequential processing departments: Mixing,Baking,and Packaging.The following transactions occurred during February:

Note: No direct materials were used by the Baking Department.
Required:
A.Post each of these transactions to the company's inventory T-accounts provided below.
B.Determine the balance at month end in each of the T-accounts.
C.Assume that 1,600,000 cakes were completed and transferred out of the Packaging Department during the month.What was the cost per unit of making each cake?

Question 32

A system for assigning costs for products made in a continuous process is

A)job costing.
B)process costing.
C)equivalent units costing.
D)conversion cost costing.

Question 33

Baoding mass-produces a single product using three sequential processing departments: Machining,Assembly,and Packaging.The following transactions occurred during February:

Note: No direct materials were used by the Baking Department.
Required:
A.Post each of these transactions to the company's inventory T-accounts provided below.
B.Determine the balance at month end in each of the T-accounts.
C.Assume that 1,075,000 units were completed and transferred out of the Packaging Department during the month.What was the cost per unit of making each unit?

Question 34

Conversion costs and direct materials costs are generally both added at the end of the production process.

Question 35

Equivalent units express the amount of work done during a period of time in terms of fully completed units of output.

Question 36

The costing system used by a company making computer chips would be

A)job costing.
B)process costing.
C)equivalent units costing.
D)conversion cost costing.

Question 37

A company manufactures organic juices.Last month's costs were:

What were the conversion costs for the month?

A)$250,000
B)$385,000
C)$460,000
D)$210,000

Question 38

In a process costing environment,direct materials and direct labour are usually combined into one cost category called "conversion costs."

Question 39

The number of partially completed units multiplied by the percentage of process started equals the number of equivalent units.

Question 40

The costing system used by a company producing custom window treatments would be

A)job costing.
B)process costing.
C)equivalent units costing.
D)conversion cost costing.

Question 41

If all direct materials are added at the beginning of the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is 0%.

Question 42

Companies that use automated production processes often condense the three manufacturing costs into two categories: direct labour and conversion costs.

Question 43

A company uses a process system.The number of equivalent units in ending WIP inventory regarding direct materials costs and conversion costs is

A)always lower for direct materials.
B)always equal.
C)always lower for conversion costs.
D)none of the above

Question 44

The FIFO method requires that any units in beginning inventory be costed separately from any units started in the current period.

Question 45

If all direct materials are added at the end of the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is

A)0%.
B)100%.
C)50%.
D)none of the above.

Question 46

The number of equivalent units is usually the same for direct materials and conversion costs.

Question 47

If conversion costs are added evenly throughout the production process,and the units have made it 50% of the way through the production process,then the percentage completion for conversion costs is

A)0%.
B)100%.
C)50%.
D)none of the above.

Question 48

Direct materials are usually added evenly throughout the production process.

Question 49

If all direct materials are added at the beginning of the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is 50%.

Question 50

If all direct materials are added at the end of the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is 0%.

Question 51

If conversion costs are added evenly throughout the production process,and the units have made it 50% of the way through the production process,then the percentage completion for conversion costs is 50%.

Question 52

In a process costing system,manufacturing costs are usually combined into two categories.

Question 53

If all direct materials are added at the beginning of the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is 100%.

Question 54

If all direct materials are added at the beginning of the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is

A)0%.
B)100%.
C)50%.
D)none of the above.

Question 55

If all direct materials are added at the end of the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is 50%.

Question 56

The weighted average and FIFO methods differ only in how they treat beginning inventory.

Question 57

If all direct materials are added at the end of the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is 100%.

Question 58

Companies that use automated production processes often condense the three manufacturing costs into two categories: direct materials and conversion costs.

Question 59

If conversion costs are added evenly throughout the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is

A)0%.
B)100%.
C)50%.
D)unknown,based on the given information.

Question 60

The weighted-average method of process costing is simpler than the FIFO method.

Question 61

The full-time employees at Percy Enterprises work 8 hours per day,while the part-time employees work 4 hours per day.Percy has 2,000 full-time employees and 800 part-time employees.What is the number of full-time equivalent employees?

A)2,000
B)1,400
C)2,400
D)2,800

Question 62

Natural Desserts has 2,500 gallons of paint in WIP inventory,with all materials already added.What are equivalent units in ending WIP inventory for materials if the paint is 80% through the process?

A)0
B)2,500
C)500
D)2,000

Question 63

The Baking Department of Sweet Cakes Co.had 20,000 partially completed units in work in process at the end of August.All of the direct materials had been added to these units,but the units were only 75% of the way through the conversion process.In addition,450,000 units had been completed and transferred out of the Baking Department to the Packaging Department during the month.
Required:
A.What are the total equivalent units for direct materials?
B.At the end of the year,what are the equivalent units for conversion costs?

Question 64

In a process system,direct labour and manufacturing overhead are normally

A)incurred at the end of the process.
B)incurred in full at the beginning of the process.
C)incurred evenly throughout the process.
D)not recorded.

Question 65

What are the total equivalent units for direct materials for the Abbott Corporation if all manufacturing costs are added during the process?

A)4,000
B)3,200
C)11,200
D)12,000

Question 66

At the end of the period,what are the total equivalent units for cheese,sauce and toppings?

A)19,800
B)22,000
C)21,340
D)2,200

Question 67

A measure of the amount of work done,expressed in complete units of output is

A)job costing
B)process costing
C)equivalent units
D)conversion costs

Question 68

The Baking Department of Sweet Cakes Co.had 50,000 partially completed units in work in process at the end of July.All of the direct materials had been added to these units,but the units were only 60% of the way through the conversion process.In addition,900,000 units had been completed and transferred out of the Baking Department to the Packaging Department during the month.
Required:
A.What are the total equivalent units for direct materials?
B.At the end of the year,what are the equivalent units for conversion costs?

Question 69

There are a total of 12,000 students at a school.Seventy percent of them go full time at 16 hours per term.Ten percent take a half-load of 8 hours per term,and twenty percent take a three-quarter load of 12 hours per term.What is the equivalent number of full-time students?

A)12,000
B)10,800
C)8,400
D)2,400

Question 70

The following information is provided by Wilson Company:

The units in ending WIP inventory were 65% complete for materials and 45% complete for conversion costs.All manufacturing costs are added during the process.
Required
A.What are the total equivalent units for direct materials?
B.At the end of the year,what are the equivalent units for conversion costs?

Question 71

Natural Desserts has 2,500 gallons of paint in WIP inventory,with all materials already added.The paint is 60% through the process.Assuming all conversion costs are added evenly throughout the process,what are the equivalent units for conversion costs?

A)0
B)1,500
C)2,000
D)500

Question 72

At the end of the year,what are the equivalent units for conversion costs for Dart Manufacturing if all manufacturing costs are added during the process?

A)3,000
B)3,800
C)2,000
D)1,800

Question 73

The following information is provided by Gibson Company:

The units in ending WIP inventory were 85% complete for materials and 35% complete for conversion costs.All manufacturing costs are added during the process.
Required
A.What are the total equivalent units for direct materials?
B.At the end of the year,what are the equivalent units for conversion costs?

Question 74

Green Paints has 4,000 gallons of paint in WIP inventory,with all materials already added.The paint is 80% through the process.Assuming all conversion costs are added evenly throughout the process,what are the equivalent units for conversion costs?

A)800
B)0
C)3,200
D)4,000

Question 75

At the end of the year,what are the equivalent units for conversion costs for the Abbott Corporation if all manufacturing costs are added during the process?

A)8,000
B)9,600
C)1,600
D)4,800

Question 76

What are the total equivalent units to account for crust ingredients?

A)19,800
B)24,400
C)2,200
D)22,000

Question 77

A business has 200 full-time workers who work 8 hours per day.They have 100 part-time workers who work 5 hours per day.What is the number of full-time equivalent employees?

A)263
B)300
C)200
D)188

Question 78

What are the total equivalent units for direct materials for Dart Manufacturing if all manufacturing costs are added during the process?

A)5,000
B)2,700
C)3,000
D)4,700

Question 79

What are the total equivalent units for conversion costs?

A)2,200
B)22,000
C)21,340
D)23,540

Question 80

Green Paints has 4,000 gallons of paint in WIP inventory,with all materials already added.What are equivalent units in ending WIP inventory for materials if the paint is 80% through the process?

A)0
B)800
C)3,200
D)4,000