Question 1

In a job-order costing system,as goods are produced,product costs (direct material,direct labor,and overhead)are accumulated in the:

Accepted Answer

A)  Work in Process Inventory account. 
B)  Raw Materials Inventory account. 
C)  Finished Goods Inventory account. 
D)  Cost of Goods Sold account.

Question 2

Job-order and process costing systems are used only in the United States.

Accepted Answer

A) True 
 B)False

Question 3

Steele Manufacturing Company reported the following Work in Process Inventory account activity measured in units.The ending inventory was estimated to be 70% complete. Beginning inventory 20,000
Started 90,000
Ending inventory 15,000
What is the number of equivalent units in Steele's ending work in process inventory?

Accepted Answer

A)  14,000 
B)  15,000 
C)  10,500 
D)  None of these answers are correct.

Question 4

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare recognized depreciation of $600 on manufacturing equipment.Which of the following describes the effect of this event on the accounting equation?

Accepted Answer

A)  Total assets and total equity are unaffected. 
B)  Both total assets and total equities increase. 
C)  Total assets and net income decrease. 
D)  Total assets increase and net income increase.

Question 5

Indicate whether each of the following statements is true or false.
Applying overhead costs to a job is an asset exchange transaction.______
The cost of finished goods in a job-order costing system includes the costs of direct materials,direct labor,and manufacturing overhead.______
When goods are completed,an entry is made to decrease the balance of the finished goods inventory.______
When a job is completed and transferred to finished goods,the job cost sheet accompanies the job.______
The payment of wages to production employees is recorded on the statement of cash flows as a cash flow for investing activities if the goods have not yet been sold.______

Accepted Answer

The answer of Indicate whether each of the following statements...

Question 6

Indicate whether each of the following statements about process costing systems is true or false.
The use of a predetermined overhead rate is not required with process costing because the method calculates an average unit cost.______
When manufacturing overhead is applied to units of product,total assets do not change.______
For Morris Company,the cost per equivalent unit was $3.58.If the ending work in process was 8,000 units 85% complete,the total cost assigned to these units would be $28,640.______
A company with three processing departments generally would calculate a cost per equivalent unit for each department.______
With a process costing system,a company will not have to deal with underapplied or overapplied overhead.______

Accepted Answer

The answer of Indicate whether each of the following statements...

Question 7

Select the correct formula for computing the cost to be assigned to ending inventory in a process costing system.

Accepted Answer

A)  Ending inventory equivalent units × cost per equivalent unit 
B)  Ending inventory units × cost per equivalent unit 
C)  Beginning inventory cost + transferred-in costs 
D)  Beginning inventory units + units transferred in - units transferred out

Question 8

Langdon Company experienced an accounting event that affected its financial statements as indicated below: $$\begin{array} { | c | c | c | c | c | c | c | c | c | c | } 
\hline \text { Assets } & = & \text { Liabilities } & + & \text { Equity } & \text { Revenue } & - & \text { Expense } & = & \text { Net income } \
\hline ( 250 ) & = & n / \mathrm { a } & + & ( 250 ) & \mathrm { n } / \mathrm { a } & - & 250 & = & ( 250 ) \
\hline
\end{array}$$ Which of the following transactions could have caused the indicated effects on the company's accounting equation?

Accepted Answer

A)  Goods transferred from work in process to finished goods. 
B)  Allocation of underapplied overhead to cost of goods sold. 
C)  Collection of account receivable. 
D)  Allocation of overapplied overhead to cost of goods sold.

Question 9

Trenton Company is a manufacturing company with several processing departments.The company uses a process costing system.When goods are complete,the product cost transferred to finished goods inventory includes the sum of product costs from all the processing departments.

Accepted Answer

A) True 
 B)False

Question 10

A process costing system and a job-order costing system both use a predetermined overhead rate to apply estimated manufacturing overhead costs to work in process.

Accepted Answer

A) True 
 B)False

Question 11

For a company using a process costing system,as units are transferred from one department to the next,their costs are transferred along as well.

Accepted Answer

A) True 
 B)False

Question 12

Select the response from the list provided that best matches each of the following descriptions:

Accepted Answer

The answer of Select the response from the list provided...

Question 13

Indicate whether each of the following statements about process costing systems is true or false.
Process costing systems use the same general ledger accounts as job-ordering cost systems.______
Job-order costing systems accumulate product costs by departments.______
In a process costing system,as units are transferred from one processing department to another,their costs are transferred to finished goods inventory.______
In a process costing system,the movement of costs parallels the physical movement of products.______
In a process costing system,each batch has its own Work in Process account.______

Accepted Answer

The answer of Indicate whether each of the following statements...

Question 14

Factory insurance is an indirect product cost and part of overhead.

Accepted Answer

A) True 
 B)False

Question 15

Why does a company that uses a process costing system need to calculate equivalent units?

Accepted Answer

The answer of Why does a company that uses a...

Question 16

Jiminez Company engaged in the following transactions during May:
1.Purchased raw materials for cash,$400
2.Used raw materials to begin jobs,$284
3.Paid wages of production employees,$180
4.Applied overhead at rate of $1.25 per direct labor dollar
5.Completed job that had cost $320
6.Sold for $440 cash goods that had cost $295 to complete
Required:
Use the horizontal statements model provided to indicate how each of these events affected Jiminez's financial statements.Show dollar amounts of increases and decreases.If an item is not affected by a transaction,indicate by writing NA.

Accepted Answer

The answer of Jiminez Company engaged in the following transactions...

Question 17

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare applied estimated manufacturing overhead costs of $1,550 to Job #132.Which of the following statements regarding this transaction is correct?

Accepted Answer

A)  Work in process inventory decreases. 
B)  Net income decreases. 
C)  Manufacturing overhead decreases. 
D)  Total equity increases.

Question 18

Gibbons Company uses a process costing system and the weighted average method.The company had 400 units of product in its work in process inventory at the beginning of the period.During the period 1,500 additional units of product were started.At the end of the period there were 750 units of product in the Work in Process account.The ending work in process inventory was estimated to be 30% complete.The beginning work in process inventory had a cost of $2,000.Product costs totaling $42,000 were added to work in process during the period.The number of equivalent units in ending work in process is:

Accepted Answer

A)  450. 
B)  750. 
C)  1,275. 
D)  225.

Question 19

Which of the following accounts is reported on the balance sheet?

Accepted Answer

A)  Raw Materials Inventory. 
B)  Work in Process Inventory. 
C)  Finished Goods Inventory. 
D)  All of these answers are correct.

Question 20

Which product costing system distributes costs evenly across total production?

Accepted Answer

A)  Process costing system 
B)  Job-order costing system 
C)  Standard costing system 
D)  Variable costing system

Exam 12: Job-Order, process, and Hybrid Costing Systems

In a job-order costing system,as goods are produced,product costs (direct material,direct labor,and overhead) are accumulated in the:

Job-order and process costing systems are used only in the United States.

Select the correct formula for computing the cost to be assigned to ending inventory in a process costing system.

Trenton Company is a manufacturing company with several processing departments.The company uses a process costing system.When goods are complete,the product cost transferred to finished goods inventory includes the sum of product costs from all the processing departments.

A process costing system and a job-order costing system both use a predetermined overhead rate to apply estimated manufacturing overhead costs to work in process.

For a company using a process costing system,as units are transferred from one department to the next,their costs are transferred along as well.

Select the response from the list provided that best matches each of the following descriptions:

Factory insurance is an indirect product cost and part of overhead.

Why does a company that uses a process costing system need to calculate equivalent units?

O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare applied estimated manufacturing overhead costs of $1,550 to Job #132.Which of the following statements regarding this transaction is correct?

Which of the following accounts is reported on the balance sheet?

Which product costing system distributes costs evenly across total production?