Deck 5: Process Cost Accounting--General Procedures

Question 1

The cost of an equivalent unit is equal to:

A)A unit of work in process inventory.
B)The amount of cost necessary to start a unit of production into work in process.
C)The cost necessary to complete one unit of production.
D)A unit of work in process inventory.

Answer 1

C

Question 2

Which of the following firms is least likely to use process costing?

A)A yogurt manufacturer.
B)A refiner of petroleum products.
C)A machine tool manufacturer.
D)A manufacturer of concrete products.

Answer 2

C

Question 3

All of the following are characteristics of a production report except:

A)It includes the number of units completed during the period.
B)It includes the costs incurred by the department during the period.
C)It includes the number of units in ending work-in-process and the estimated stage of completion.
D)The department manager completes the report on a monthly basis.

Answer 3

B

Question 4

The production report for Phillips Industries,which had no beginning inventory at the beginning of the month,included the following information for September: If the equivalent units for September's production were 77,400,how many units were in process at the end of the month,and how complete were they?

A)9,000;30%
B)9,000;60%
C)3,000;90%
D)6,000;90%

Question 5

Using the average cost method of process costing,the computation of manufacturing cost per equivalent unit considers:

A)Current costs only.
B)Current costs plus cost of beginning work in process inventory.
C)Current costs plus cost of ending work in process inventory.
D)Current costs less cost of beginning work in process inventory.

Question 6

The number of whole units that could have been completed during a period,using the production costs incurred during that period is called:

A)Standard production.
B)Equivalent production.
C)Total units.
D)Manufactured units.

Question 7

A cost object in a process cost system is usually a:

A)Department.
B)Job.
C)Specific product.
D)Employee.

Question 8

A true process costing system could make use of each of the following except:

A)Predetermined factory overhead rates.
B)Individual jobs.
C)Cost centers.
D)General ledger control accounts.

Question 9

Characteristics that job order costing and process costing have in common include all of the following except:

A)The use of predetermined factory overhead rates.
B)Each can be used by service firms.
C)The costs of materials and labor are charged to the departments where they are incurred.
D)The primary objective is to complete a unit cost for products.

Question 10

Which of the following is not included in departmental product costs?

A)Costs identifiable with the department.
B)Costs added by prior production departments carried to the department.
C)Cost of sales and administrative departments that have been allocated to the production department.
D)Costs of factory service departments that have been allocated to the production department.

Question 11

Which of the following is not a duty of the cost accountant in a process cost system?

A)Estimating the stage of completion of in-process units at the end of the month.
B)Collecting the periodic production costs.
C)Preparing the journal entries to record the factory operations.
D)Computing the amount of equivalent units.

Question 12

Daniel LLC incurred cost of $45,000 for material,$25,000 for labor,and $24,000 for factory overhead.There was no beginning or ending work in process.5,000 units were completed and transferred out.The cost per unit is: ​

A)$9.00
B)$5.00
C)$18.80
D)$4.80

Question 13

Process costing techniques should be used in assigning costs to products:

A)If the product is manufactured on the basis of each order received.
B)In all manufacturing situations.
C)When production is only partially completed during the accounting period.
D)If the product is composed of mass-produced homogeneous units.

Question 14

The primary task of process costing is to allocate total cost between:

A)units finished during the period and units still in process at the end of the period.
B)materials and conversion costs.
C)units in process at the beginning of the period and units started during the period.
D)units started during the period and units finished during the period.

Question 15

If there is no beginning work in process inventory and the ending work in process inventory is 90 percent complete,the number of equivalent units would be:

A)The same as the units placed in process.
B)The same as the units completed.
C)Less than the units placed in process.
D)Less than the units completed.

Question 16

A characteristic of a process cost accounting system is:

A)Costs are accumulated by order.
B)Work in process inventory is restated in terms of equivalent production.
C)It is used by a company manufacturing custom machinery.
D)None of these is correct.

Question 17

Which of the following characteristics applies to process costing?

A)Differentiated products are provided on a special order basis.
B)Cost are accumulated by department.
C)Cost are accumulated by jobs.
D)Direct labor workers must keep detailed records as to the jobs on which they worked.

Question 18

All of the following could be included in the cost of a product located in the final production department of a multi-step process except:

A)The costs of materials,labor and overhead identifiable with that department.
B)Logistics (product fulfilment)costs.
C)The costs of service departments that have been allocated to production departments.
D)The costs of prior production departments.

Question 19

An error was made in the computation of the stage of completion of the current year's ending work in process inventory.The error resulted in assigning a lower stage of completion to each component of the inventory than actually was the case.What is the resultant effect of this error upon: ​ (1) (2) (3)

A)Understate Overstate Overstate
B)Understate Understate Overstate
C)Overstate Understate Understate
D)Overstate Overstate Understate

Question 20

Brown Company incurred costs of $20,000 for material,$10,000 for labor,and $16,000 for factory overhead.There was no beginning or ending work in process.5,000 units were completed and transferred out.The unit cost for material is: ​

A)$4.00
B)$2.00
C)$9.20
D)$3.20

Question 21

The Kluesner Company started the month of June with 3,000 units in process which were 60% completed.The company started 25,000 units during June,and at the end of the month had 3,000 units on hand which were 40% completed.The number of units transferred to finished goods during June was:

A)25,500
B)28,500
C)24,500
D)25,000

Question 22

The beginning work in process inventory is 60 percent complete,and the ending work in process inventory is 50 percent complete.The dollar amount of the production cost included in the ending work in process inventory (using the average cost method)is determined by multiplying the average unit costs by what percentage of the total units in the ending work in process inventory?

A)100 percent
B)60 percent
C)55 percent
D)50 percent

Question 23

The cost of production summary for Maha Industries follows: What is the journal entry to record factory overhead applied to production?

A)Work in process 3,000 Factory overhead 3,000
​
B)Factory overhead 3,000 Various accounts 3,000
​
C)Work-in-process 375 Factory overhead 375
​
D)Factory overhead 375 Work in process 375

Question 24

The cost of production summary for Maha Industries follows: What is the journal entry to record materials issued into production?

A)Finished goods 8,000 Materials 8,000
​
B)Work-in-process 8,000 Materials 8,000
​
C)Work-in-process 1,000 Materials 1,000
​
D)Materials 8,000 Accounts payable 8,000

Question 25

The records of Andrews Company reflect the following data: Work in process,beginning of the month - 4,500 units;1 / 3 completed at a cost of $2,400 for materials,$825 for labor,and $3,000 for overhead.
Production costs for the month - materials - $20,695;labor - $13,050;overhead - $41,500
Units completed and transferred to finished goods - 35,000
Work in process,end of month - 3,000 units;3 / 4 completed
Compute the equivalent units of production.

A)32,750
B)37,250
C)38,000
D)36,500

Question 26

Howell Company uses the average cost method of process costing.Howell had 1,000 units in beginning work-in-process which were 75% complete.Costs associated with this inventory were $3,200.When calculating the cost per equivalent unit for the month of June,Howell's controller should:

A)Not consider the $3,200 as those costs were incurred in a prior period.
B)Calculate the cost to complete the 1,000 items in beginning work-in-process separately.
C)Include the $3,200 with the current month's cost to arrive at total cost for production to date.
D)Include the equivalent units to complete the beginning work-in-process inventory to arrive at the equivalent units for the period.

Question 27

In a given process costing system,the equivalent units of production are computed using the average cost method.The percentage of completion for the current period only is included in the calculation of the:

A)No No
B)No Yes
C)Yes No
D)Yes Yes

Question 28

Michael Company had 2,000 units in work in process at January 1 that were 80 percent complete.During January,15,000 units were completed.At January 31,4,000 units remained in work in process that were 40 percent complete.Using the average cost method,how many units were started during January?

A)21,000
B)18,200
C)17,000
D)19,000

Question 29

In a company that uses process costing,the cost of goods manufactured is equal to:

A)total production costs added during the period.
B)total production costs accounted for.
C)the cost of goods completed in the period.
D)the cost of ending work in process at the end of the period.

Question 30

Omega Corporation uses process costing to calculate the cost of manufacturing pool systems.Beginning work in process included 30,000 units 60 percent complete.During the month 170,000 units were completed,20,000 units remain in work in process at 80 percent complete.Using the average cost method,the equivalent units are:

A)170,000
B)196,000
C)186,000
D)190,000

Question 31

Norma Company had 10,000 units in work in process at January 1 that were 50 percent complete.During January,25,000 units were completed.At January 31,6,000 units remained in work in process that were 80 percent complete.Using the average cost method,the equivalent units for January were:

A)31,000.
B)29,800.
C)35,000.
D)36,000.

Question 32

Information concerning the materials used in the Blending Department in November is as follows: If the ending work-in-process inventory is 75% complete,using the average cost method,what was the materials cost in Work in Process at November 30?

A)$7,852
B)$8,280
C)$6,120
D)$7,317

Question 33

The records of Andrews Company reflect the following data: Work in process,beginning of the month - 4,500 units;1 / 3 completed at a cost of $2,400 for materials,$825 for labor,and $5,000 for overhead.
Production costs for the month - materials - $20,695;labor - $13,050;overhead - $41,500
Units completed and transferred to finished goods - 35,000
Work in process,end of month - 3,000 units;3 / 4 completed
What is the unit cost for material?

A)$.66
B)$.59
C)$.56
D)$.62

Question 34

The production report for Matthews,Inc.included the following information for May: How many units were started during the period?

A)43,500
B)58,700
C)47,500
D)50,900

Question 35

Information concerning the materials used in the Mixing Department in October is as follows: If the ending work-in-process inventory is 50% complete,using the average cost method,what was the materials cost in Work in Process at October 31?

A)$2,644
B)$2,700
C)$4,330
D)$4,811

Question 36

The production report for Glenway Company for February contained the following information: Work in process,beginning of the month - 3,500 units;1 / 5 completed
Units completed and transferred to finished goods - 25,000
Work in process,end of month - 4,000 units;1 / 4 completed
Production costs for the month were: materials - $25,325;labor - $20,175;overhead - $38,950.Costs in beginning work in process were $5,250.
What is the cost per equivalent unit?

A)$3.45
B)$3.59
C)$3.20
D)$3.25

Question 37

The cost of production summary for Maha Industries follows: What is the journal entry to record the distribution of labor to production?

A)Finished goods 4,000 Payroll 4,000
​
B)Work in process 4,000 Overhead 4,000
​
C)Work in process 4,000 Payroll 4,000
​
D)Payroll 4,000 Accrued payroll 4,000

Question 38

Information for the month of January concerning Department A,the first stage of Cando Corporation's production cycle,follows: The ending work in process is 50 percent complete.How would the total costs accounted for be distributed using the average cost method?

A)$105,000 $12,600
B)$ 67,200 $14,400
C)$ 67,200 $50,400
D)$105,000 $14,400

Question 39

The cost of production summary for Maha Industries follows: What is the journal entry to record completed production and transfer to the warehouse?

A)Work in process 13,125 Finished goods 13,125
B)Finished goods 1,875 Work in process 1,875
C)Finished goods 3,000 Factory overhead 3,000
D)Finished goods 13,125 Work in process 13,125

Question 40

The production report for Marck Company included the following information for August: How many units were in process at the beginning of the month?

A)1,700
B)1,000
C)4,700
D)5,700

Question 41

Bear Printing prints one brochure in two departments on a continuous basis and uses the average cost method of process cost accounting.The following information was reported for the month of April,20--: In addition,the cost of production summary for the Binding Department follows: Prepare the Statement of Cost of Goods Manufactured.

Question 42

The Binding Department is the second stage of News Printing's production cycle.On May 1,the beginning work in process contained 30,000 units that were 60 percent complete.During May,170,000 units were transferred in from the first stage of Pine's production cycle and 160,000 units were completed and transferred to Finished Goods.On May 31,the ending work in process contained 40,000 units that were 25 percent complete.Using the average cost method,the equivalent units of the Assembly Department are:

A)170,000 54,000 50,000
B)200,000 160,000 160,000
C)200,000 170,000 170,000
D)240,000 200,000 200,000

Question 43

Daniel LLC incurred the following cost in the month of October:
Material $55,000
Labor $46,000
Factory Overhead $23,000
There was no beginning inventory.Ending work in process was 10,000 units at 50 percent complete.15,000 units were completed and transferred out.
Prepare a cost of production summary for the month,assuming Daniel uses the average cost method of process costing.

Question 44

Asia,Inc. ,manufactures one product in two departments on a continuous basis and uses the average cost method of process cost accounting.The following information was reported for the month of August,20--:
Production Report
Cutting
Department
Assembly
Department
In process,beginning of month
1,100
600
Finished and transferred during month
8,000
8,000
Work in process,end of month
1,500
600
Stage of completion
50%
40%
Prepare a cost of production summary for each department for the month.

Question 45

Consider the following cost of production summary for Carrigan Products for May.
a.Prepare the journal entries to record the production activity.
b.Prepare the Statement of Cost of Goods Manufactured for May.

Question 46

Bear Printing prints one brochure in two departments on a continuous basis and uses the average cost method of process cost accounting.The following information was reported for the month of April,20--: In addition,the cost of production summary for the Binding Department follows: Prepare the journal entries to record production.

Question 47

What are transferred-in costs as used in a process cost accounting system?

A)Labor that is transferred from another department within the same plant instead of hiring temporary workers from the outside
B)Costs that have been incurred in a prior department on units that have been moved into a subsequent department
C)Supervisory salaries that are transferred from an overhead cost center to a production cost center
D)Ending work in process inventory of a previous process that will be used in a succeeding process

Question 48

The Joan Company uses the process cost system and average cost method.The following production data are for the month of July,20--. (a)Prepare a cost of production summary for the month.
(b)Prepare the journal entries to record production for the month

Question 49

The Assembly Department is the second stage of Pine Company's production cycle.On May 1,the beginning work in process contained 15,000 units that were 40 percent complete.During May,85,000 units were transferred in from the first stage of Pine's production cycle.On May 31,the ending work in process contained 20,000 units that were 75 percent complete.Using the average cost method,the equivalent units of the Assembly Department are:

A)85,000 70,000 70,000
B)100,000 80,000 80,000
C)100,000 95,000 95,000
D)120,000 100,000 100,000

Question 50

Department B had 1,000 units in beginning work-in-process which had transferred in costs of $2,500 from Department A associated with them.During the period,12,000 more units having costs of $36,000 were transferred in to Department B from Department A.What is the unit cost for the units transferred from Department A.

A)$2.00
B)$2.75
C)$2.96
D)$3.00

Question 51

Gordon Products manufactures one product in two departments on a continuous basis and uses the average cost method of process cost accounting.The following information was reported for the month of May,20--:

Question 52

The total number of units to be accounted for in the second department of a process is:

A)the number of units in process at the beginning of the period plus the units received from another department during the period.
B)the number of units in process at the beginning of the period plus the units transferred out to another department during the period.
C)the number of units in process at the end of the period plus the units completed and on hand.
D)the number of units in process at the end of the period plus the units received from another department during the period.

Question 53

The Columbus Company has three departments A,B and C.Material requisitions amounted to $10,000,$8,000 and $5,000,respectively,for departments A,B and C.In addition,$3,000 of indirect materials were used during the period.What is the entry to record the materials used during the period?

A)Work-in-process 23,000 Materials - Department A 10,000
Materials - Department B 8,000
Materials - Department C 5,000
​
B)Work-in-process - Department A 10,000 Work-in-process - Department B 8,000
Work-in-process - Department C 5,000
Materials 23,000
​
C)Work-in-process - Department A 10,000 Work-in-process - Department B 8,000
Work-in-process - Department C 5,000
Factory overhead 3,000
Materials 26,000
​
D)Work-in-process 23,000 Factory overhead 3,000
Materials 26,000

Question 54

"Goods completed and on hand" refers to:

A)goods in the finished goods warehouse.
B)goods awaiting sale.
C)finished goods purchased directly from suppliers.
D)finished goods in a department that have not yet been transferred to the next department.

Question 55

Wolf Company has two departments,Mixing and Curing.The following information is available for September: The entry to record the transfer of inventory from the mixing to the curing department is:

A)Work in process - Curing 18,000 Work in process - Mixing 18,000
B)Finished goods 18,000 Work in process - Mixing 18,000
C)Work in process - Mixing 5,600 Work in process - Curing 5,600
D)Work in process - Curing 18,000 Transferred in costs 18,000

Question 56

The Paul Manufacturing Company uses the process cost system and the average cost method.The following production data are for the month of April,20--. Prepare a cost of production summary for the month.

Question 57

In a production cost report using process costing,transferred-in costs are similar to:

A)Material added at the beginning of the process.
B)Conversion costs added during the process.
C)Costs transferred to the next process.
D)Costs included in beginning inventory.

Question 58

The records of Jordan Company reflect the following data:
Work in process,beginning of the month - 4,500 units;30% completed at a cost of $16,700 for materials,$7,600 for labor,and $10,400 for overhead.
Production costs for the month - materials - $54,300 labor;- $25,400;overhead - $34,600
Units completed and transferred to finished goods - 18,000
Work in process,end of month - 5,000 units;40% completed
Calculate the unit cost for the month for materials,labor and factory overhead.

Question 59

Using the data presented below,determine the figures that should be inserted in the blank spaces.

Question 60

Wolf Company has two departments,Mixing and Curing.The following information is available for September: The entry to record the transfer of inventory from the curing department to the warehouse is:

A)Finished goods 18,000 Work in process - Mixing 18,000
B)Finished goods 24,000 Work in process - Curing 24,000
C)Work in process - Curing 24,000 Work in process - Mixing 24,000
D)Work in process - Curing 4,500 Finished goods 4,500

Question 61

Howard Corporation has two production departments.Curing has 12,000 units in process at the beginning of the period,3 / 4 complete.During the period,45,000 units were received from Crushing,48,000 units were transferred to Finished Goods,and 9,000 units were in process at the end of the period,2/ 3 complete.Cost information was as follows:
a.Determine the unit cost for the month in Curing.
b.Determine the total cost of the products transferred to Finished Goods.
c.Determine the total cost of the ending Work in Process inventory.