Q&A Hero

Q: A process cost summary involves computations and analysis at four sequential steps. These are (1) _________ (2) _____________, (3) _______________, and (4) ______________.

Q: In process costing, factory overhead incurred does not usually equal that applied, which yields either ____________________ or ___________________ overhead.

Q: In a manufacturing operation with two process departments (1 and 2), the flow of costs would proceed from Goods in Process, Department #1 to ________________.

Q: In a process costing accounting system, direct materials used are debited to the __________ account, and indirect materials used are debited to the ____________ account.

Q: Materials and labor costs that are clearly associated with a specific process are known as ___________________. Those costs that are not clearly associated with a specific process are called ________________.

Q: The fourth step in accounting for production activity in a period is to prepare a cost reconciliation, which reconciles __________________ with the ___________________.

Q: The third step in accounting for production activity in a period is to compute the ______________________.

Q: The second step in accounting for production activity in a period is to compute ______________________.

Q: If a process has _______________ or _______________ inventory of partially completed production, equivalent units must be calculated so that total costs incurred during the period are assigned to all units worked on.

Q: An equivalent unit of production is an estimate of efforts that is used to calculate the ______________ of each production component.

Q: Harbor Manufacturing Company uses a process cost accounting 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 cost accounting. The following are the operating and cost data information for October. The October 1 beginning Goods 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 Goods 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 goods 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 companys process cost summary for October using the weighted average method.

Q: Prepare journal entries to record the following production activities for Sherman Manufacturing. a. Incurred overhead costs of $79,000 (paid in cash). b. Applied overhead at 110% of direct labor costs which are $93,900. c. Transferred completed products with a cost of $258,200 to finished goods inventory. d. Sold $602,000 of product on credit. Cost is $271,000.

Q: Prepare journal entries to record the following production activities for Sherman Manufacturing. a. Incurred $105,100 of factory labor cost which is paid in cash. b. Used $93,900 of direct labor in the production department. c. Used $11,200 of indirect labor.

Q: Prepare general journal entries to record the following production activities for Sherman Manufacturing. a. Purchased $82,000 of raw materials on credit. b. Used $63,500 of direct materials in production. c. Used $12,800 of indirect materials.

Q: The following table of cost information is available for the Messier Company for the month of November: Goods in Process Inventory Mixing Goods in Process Inventory Molding Finished Goods Inventory Beginning Inventory...................................... $12,000 $15,000 $24,000 Costs incurred: Direct materials................................. 22,000 14,000 Direct labor................................. 32,000 17,000 Overhead applied................................. 47,000 24,500 Costs transferred out................................. (100,000) (152,000) Costs transferred in................................. 100,000 152,000 Cost of goods sold (149,000) Ending inventory...................................... 13,000 18,500 27,000 Based on the table of cost information above, prepare the general journal entry required to record the: a. Transfer of goods from the molding department to the finished goods inventory. b. Cost of goods sold for November.

Q: Browning Company had 8,700 units in beginning inventory with accumulated costs for direct materials of $17,900, $16,500 direct labor, and $13,200 of overhead. During July, the company completed and transferred 50,000 units to finished goods. Costs incurred in the current period included $45,000 of direct materials, $58,500 of direct labor, and $46,800 of factory overhead. Ending inventory consisted of 12,000 units which were 80% complete with respect to materials and 50% complete with respect to labor and overhead. Compute the value assigned to ending inventory based on the weighted average method of inventory costing.

Q: Lipinski Company completed and transferred 90,000 units during the current period. Based on the following information, determine the cost of the goods completed during the current reporting period and journalize the transfer. Direct Materials Direct Labor/OH Costs of Beginning goods in process: $576,000 $400,000 Costs incurred this period 2,400,000 5,120,000 Equivalent units of production 96,000 92,000

Q: Heesacker, Inc. uses a process cost accounting system. The following operating and cost data occurred during October: October 1, Inventory: 30,000 units 100% complete for materials ($60,000) and 50% complete for direct labor ($7,500) and overhead ($15,000) October 31, Inventory: 20,000 units 100% complete for materials and 30% complete for direct labor and overhead Units started during Oct.: 40,000 units October production costs: Direct materials............................ $110,100 Direct labor............................ 28,900 Overhead............................ 57,800 Materials are added at the beginning of the process. Direct labor and overhead are incurred evenly throughout the process. Prepare the October process cost summary assuming the weighted average method of inventory costing.

Q: Nano Company uses a weighted average process cost system. The department started and finished 149,000 units during the current period. The ending inventory consists of 60,000 units that are 75% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $262,500 and overhead costs of $126,000. (a) Compute the equivalent cost per unit for direct labor. (b) Compute the equivalent cost per unit for overhead.

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Q: Refer to the following information about the Dipping Department of the Indiana Factory for the month of August. Indiana Factory uses the FIFO method of inventory costing. Equivalent Units Total Cost Beginning goods in process: Costs from prior month......................................... $ 7,000 Materials added......................................... 300 Labor and overhead added......................................... 375 Started and completed goods: Materials added......................................... 2,000 Labor and overhead added......................................... 2,000 Ending goods in process: Materials added......................................... 320 Labor and overhead added......................................... 360 The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the ending goods in process inventory for August.

Q: Refer to the following information about the Dipping Department of the Indiana Factory for the month of August. Indiana Factory uses the FIFO method of inventory costing. Equivalent Units Total Cost Beginning goods in process: Costs from prior month......................................... $ 7,000 Materials added......................................... 300 Labor and overhead added......................................... 375 Started and completed goods: Materials added......................................... 2,000 Labor and overhead added......................................... 2,000 Ending goods in process: Materials added......................................... 320 Labor and overhead added......................................... 360 The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned all units that were completed and transferred during August.

Q: Refer to the following information about the Dipping Department of the Indiana Factory for the month of August. Indiana Factory uses the weighted average method of inventory costing. Equivalent Units Total Cost Beginning goods in process: Costs from prior month......................................... $ 7,000 Materials added......................................... 300 Labor and overhead added......................................... 375 Started and completed goods: Materials added......................................... 2,000 Labor and overhead added......................................... 2,000 Ending goods in process: Materials added......................................... 320 Labor and overhead added......................................... 360 The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the units that were started and completed during August.

Q: Refer to the following information about the Dipping Department of the Indiana Factory for the month of August. Indiana Factory uses the FIFO method of inventory costing. Equivalent Units Total Cost Beginning goods in process: Costs from prior month......................................... $ 7,000 Materials added......................................... 300 Labor and overhead added......................................... 375 Started and completed goods: Materials added......................................... 2,000 Labor and overhead added......................................... 2,000 Ending goods in process: Materials added......................................... 320 Labor and overhead added......................................... 360 The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the beginning units that were completed and transferred during August.

Q: Iolaus Company provides the following data for the current year: Estimated Factory Overhead 7,800 Factory Overhead Incurred $11,400 Factory Overhead Applied ? Estimated Direct Labor Cost 12,000 Direct Labor Cost Incurred 11,800 Required: a. Calculate the predetermined overhead allocation rate based on direct labor. b. Determine the amount of overhead applied to production. c. Prepare the journal entry to apply factory overhead to goods in process.

Q: Prepare the required general journal entry to record the following transactions for the Flaherty Company. a. Incurred $95,000 of factory labor cost which is paid in cash. b. Used $78,000 of direct labor in the production department. c. Used $17,000 of indirect labor.

Q: Prepare the required general journal entries to record the following transactions for the Bell Company. a. Purchased $40,000 of raw materials on account. b. Used $12,000 of direct materials in the production department. c. Used $5,000 of indirect materials.

Q: A company's January 1 goods in process inventory contained 30,000 units that were 25% complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and the remaining 40,000 were 20% complete. Calculate the equivalent units of production for the year using the FIFO method.

Q: Refer to the following information about the Painting Department in the Richardson Factory for the month of June. Richardson Factory uses the weighted-average method of inventory costing. Beginning goods in process inventory: Physical units...................................................... ...................................................... 5,000..................................... units % complete for materials...................................................... ........................................ 70% % complete for labor and overhead...................................................... ........................................ 25% Materials cost from May...................................................... ......................................... $7,350 Labor and overhead cost from May...................................................... .......................................... $3,125 Product started and completed: Physical units............................................ ............................................ 40,000........................ units Ending goods in process inventory: Physical units...................................................... ...................................................... 4,000.................................... units % complete for materials...................................................... .............................................. 40% % complete for labor and overhead...................................................... .............................................. 10% Manufacturing costs for June: Materials...................................................... ......................................... $96,975 Labor and overhead $79,470 Compute the total cost of all units that were completed and transferred to finished goods during June. Compute the total cost of the ending goods in process inventory.

Q: Refer to the following information about the Painting Department in the Richardson Factory for the month of June. Richardson Factory uses the FIFO method of inventory costing. Beginning goods in process inventory: Physical units...................................................... ...................................................... 5,000..................................... units % complete for materials...................................................... ........................................ 70% % complete for labor and overhead...................................................... ........................................ 25% Materials cost from May...................................................... ......................................... $7,350 Labor and overhead cost from May...................................................... .......................................... $3,125 Product started and completed: Physical units............................................ ............................................ 40,000........................ units Ending goods in process inventory: Physical units...................................................... ...................................................... 4,000.................................... units % complete for materials...................................................... .............................................. 40% % complete for labor and overhead...................................................... .............................................. 10% Manufacturing costs for June: Materials...................................................... ......................................... $96,975 Labor and overhead $79,470 Compute the total cost of all units that were completed and transferred to finished goods during June. Compute the total cost of the ending goods in process inventory.

Q: Refer to the following information about the Painting Department in the Richardson Factory for the month of June. Richardson Factory uses the FIFO method of inventory costing. Beginning goods in process inventory: Physical units...................................................... ...................................................... 5,000..................................... units % complete for materials...................................................... ........................................ 70% % complete for labor and overhead...................................................... ........................................ 25% Materials cost from May...................................................... ......................................... $7,350 Labor and overhead cost from May...................................................... .......................................... $3,125 Product started and completed: Physical units............................................ ............................................ 40,000........................ units Ending goods in process inventory: Physical units...................................................... ...................................................... 4,000.................................... units % complete for materials...................................................... .............................................. 40% % complete for labor and overhead...................................................... .............................................. 10% Manufacturing costs for June: Materials...................................................... ......................................... $96,975 Labor and overhead $79,470 Compute the equivalent cost per unit for direct materials, direct labor and overhead for June.

Q: Refer to the following information about the Painting Department in the Richardson Factory for the month of June. Richardson Factory uses the FIFO method of inventory costing. Beginning goods in process inventory: Physical units... 5,000 ......................................... units % complete for materials. 70% % complete for labor and overhead. 25% Materials cost from May.. $7,350 Labor and overhead cost from May. $3,125 Product started and completed: Physical units 40,000 units Ending goods in process inventory: Physical units.... 4,000 units % complete for materials. 40% % complete for labor and overhead... . 10% Manufacturing costs for June: Materials $96,975 Labor and overhead... $79,470 Compute equivalent units for direct materials, direct labor and overhead for June.

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Q: A company's January 1 goods in process inventory contained 30,000 units that were 25% complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and the remaining 40,000 were left 20% complete. Calculate the equivalent units of production for the year using the weighted average method.

Q: Describe the flow of overhead costs in a process cost accounting system, including accounts used.

Q: Describe the flow of labor in a process cost accounting system, including accounts used.

Q: What is a hybrid costing system? When is a hybrid costing system appropriate for a manufacturer?

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

Q: Briefly explain the conditions under which job order cost accounting systems and process cost accounting systems are commonly applied.

Q: Why is the Process Cost Summary important to management and how does the Process Cost Summary accomplish its purposes?

Q: What are the four steps in accounting for production activity in a period?

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

Q: Match the following terms with the definitions. __________ (1) Equivalent units of production __________ (2) Job order cost accounting system __________ (3) Hybrid manufacturing system __________ (4) Process manufacturing system __________ (5) Process cost accounting system __________ (6) Materials consumption report __________ (7) Process cost summary A. Costing system to determine the cost of producing each job or job lot. B. Document that summarizes the materials a department uses during a reporting period; replaces materials requisition. C. Report of costs charged to a department, its equivalent units of production achieved, even the costs assigned to its output. D. A manufacturing system that contains features of both process and job order systems. E. Number of units that would be completed if all effort during a period had been applied to units that were started and finished. F. System of assigning direct materials, direct labor, and overhead to specific processes; total costs associated with each process are then divided by the number of units passing through that process to determine cost per equivalent unit. G. Process of products in a continuous flow of steps.

Q: A company uses the weighted-average method for inventory costing. At the end of the period, 22,000 units were in the ending goods in process inventory and are 100% complete for materials and 75% complete for labor and overhead. The equivalent costs per unit are; materials, $2.65, labor, $2.15, and overhead, $3.20. Compute the cost that would be assigned to the ending goods in process inventory for the period. A. $146,575. B. $176,000. C. $87,725. D. $93,775. E. $132,000.

Q: A company uses the FIFO method for inventory costing. During a period, a production department had 20,000 units in beginning goods in process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending goods in process inventory and are 75% complete. All of these are with respect to labor. The production department had labor costs in the beginning goods is process inventory of $99,000 and total labor costs added during the period are $726,825. Compute the equivalent cost per unit for labor. A. $4.40. B. $4.76. C. $4.19. D. $4.55. E. $4.61.

Q: A company uses the weighted average method for inventory costing. During a period, a production department had 20,000 units in beginning goods in process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending goods in process inventory and are 75% complete. All of these are with respect to labor. The production department had labor costs in the beginning goods is process inventory of $99,000 and total labor costs added during the period are $726,825. Compute the equivalent cost per unit for labor. A. $4.40. B. $4.76. C. $4.19. D. $4.55. E. $4.61.

Q: A company uses the FIFO method for inventory costing. During a period, a production department had 20,000 units in beginning goods in process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending goods in process inventory and are 75% complete. Compute the number of equivalent units produced by the department. A. 181,500. B. 165,000. C. 173,500. D. 145,000. E. 187,000.

Q: A company uses the weighted average method for inventory costing. During a period, a production department had 20,000 units in beginning goods in process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending goods in process inventory and are 75% complete. Compute the number of equivalent units produced by the department. A. 181,500. B. 165,000. C. 173,500. D. 145,000. E. 187,000.

Q: During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. Marchs beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. 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 labor. Compute the number of equivalent units with respect to both materials and direct labor respectively for March using the FIFO method. A. 165,000; 165,000. B. 135,000; 119,000. C. 140,000; 130,250. D. 165,000; 144,000. E. 144,000; 144,000.

Q: During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. Marchs beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. 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 labor. The production department incurred direct labor cost of $578,900 and its beginning inventory included labor cost of $54,700. Compute the direct labor cost per equivalent unit for the department using the weighted-average method. A. $4.69. B. $3.84. C. $4.86. D. $4.28. E. $4.40.

Q: During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. Marchs beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. 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 labor. The production department incurred direct materials cost of $253,000 and its beginning inventory included materials cost of $93,500. Compute the direct materials cost per equivalent unit for the department using the weighted-average method. A. $1.53. B. $2.48. C. $2.10. D. $2.57. E. $2.40.

Q: During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. Marchs beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. 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 labor. Compute the number of equivalent units with respect to both materials and direct labor respectively for March using the weighted-average method. A. 165,000; 165,000. B. 135,000; 119,000. C. 140,000; 130,250. D. 165,000; 144,000. E. 144,000; 144,000.

Q: During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. Marchs beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. 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 labor. Compute the number of units transferred to finished goods. A. 110,000. B. 135,000. C. 105,000. D. 165,000. E. 144,000.

Q: Embark produces mulch for landscaping use. The following information summarizes production operations and sales activities for June. The journal entry to record June sales is: Direct materials used $87,000 Direct labor used 160,000 Predetermined overhead rate (based on direct labor) 155% Goods transferred to finished goods 432,000 Cost of goods sold 444,000 Credit sales 810,000 A. Debit Accounts Receivable $810,000; credit Cost of Goods Sold $810,000. B. Debit Accounts Receivable $810,000; credit Sales $366,000; credit Finished Goods Inventory $444,000. C. Debit Cost of Goods Sold $444,000; credit Sales $444,000. D. Debit Finished Goods Inventory $444,000; debit Sales $810,000; credit Accounts Receivable $810,000; credit Cost of Goods Sold $444,000. E. Debit Accounts Receivable $810,000; credit Sales $810,000; debit Cost of Goods Sold $444,000; credit Finished Goods Inventory $444,000.

Q: Embark produces mulch for landscaping use. The following information summarizes production operations for June. The journal entry to record June production activities for goods transfer from production to finished goods is: Direct materials used $87,000 Direct labor used 160,000 Predetermined overhead rate (based on direct labor) 155% Goods transferred to finished goods 432,000 Cost of goods sold 444,000 Credit sales 810,000 A. Debit Finished Goods Inventory $432,000; credit Goods in Process Inventory $432,000. B. Debit Goods in Process Inventory $444,000; credit Finished Goods Inventory $444,000. C. Debit Goods in Process Inventory $432,000; credit Finished Goods Inventory $432,000. D. Debit Finished Goods Inventory $444,000; credit Goods in Process Inventory $444,000. E. Debit Goods in Process Inventory $432,000; credit Cash $432,000.

Q: Embark produces mulch for landscaping use. The following information summarizes production operations for June. The journal entry to record June production activities for overhead allocation is: Direct materials used $87,000 Direct labor used 160,000 Predetermined overhead rate (based on direct labor) 155% Goods transferred to finished goods 432,000 Cost of goods sold 444,000 Credit sales 810,000 A. Debit Factory Overhead $248,000; credit Cash $248,000. B. Debit Goods in Process Inventory $160,000; credit Factory Payroll $160,000. C. Debit Goods in Process Inventory $248,000; credit Factory Overhead $248,000. D. Debit Goods in Process Inventory $160,000; credit Factory Overhead $160,000. E. Debit Goods in Process Inventory $160,000; credit Cash $160,000.

Q: Embark produces mulch for landscaping use. The following information summarizes production operations for June. The journal entry to record June production activities for direct labor usage is: Direct materials used $87,000 Direct labor used 160,000 Predetermined overhead rate (based on direct labor) 155% Goods transferred to finished goods 432,000 Cost of goods sold 444,000 Credit sales 810,000 A. Debit Factory Payroll $160,000; credit Cash $160,000. B. Debit Goods in Process Inventory $160,000; credit Factory Payroll $160,000. C. Debit Cost of Goods Sold $160,000; credit Factory Payroll $160,000. D. Debit Goods in Process Inventory $160,000; credit Raw Materials Inventory $160,000. E. Debit Goods in Process Inventory $160,000; credit Cash $160,000.

Q: Embark produces mulch for landscaping use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is: Direct materials used $87,000 Direct labor used 160,000 Predetermined overhead rate (based on direct labor) 155% Goods transferred to finished goods 432,000 Cost of goods sold 444,000 Credit sales 810,000 A. Debit Raw Materials Inventory $87,000; credit Accounts Payable $87,000. B. Debit Raw Materials Inventory $87,000; credit Finished Goods Inventory $87,000. C. Debit Cost of Goods Sold $87,000; credit Finished Goods Inventory $87,000. D. Debit Goods in Process Inventory $87,000; credit Raw Materials Inventory $87,000. E. Debit Goods in Process Inventory $87,000; credit Cost of Goods Sold $87,000.

Q: Que Corporation uses a process cost accounting system. The company manufactured certain goods at a cost of $800 and sold them on credit to Are Corporation for $1,075. The complete journal entry to be made by Que at the time of this sale is: A. Debit Accounts Receivable $1,075; credit Sales $1,075; debit Cost of Goods Sold $800; credit Finished Goods Inventory $800. B. Debit Accounts Receivable $1,075; credit Sales $275; credit Finished Goods Inventory $800. C. Debit Cost of Goods Sold $1,075; credit Sales $1,075. D. Debit Finished Goods Inventory $800; debit Sales $1,075; credit Accounts Receivable $1,075; credit Cost of Goods Sold $800. E. Debit Accounts Receivable $1,075; debit Selling expense $800; credit Sales $1,075; credit Cost of Goods Sold $800.

Q: The following is an account for a production department, showing its costs for one month: Goods in Process Inventory Balance 5,400 Direct materials 21,600 Direct labor 16,200 Overhead 10,800 Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the units in ending goods in process inventory cost $4,590, and the started and completed units cost $41,850, what was the cost of completing the units in the beginning goods in process inventory? A. $12,150. B. $ 2,160. C. $ 7,560. D. $54,000. E. $37,260.

Q: To compute equivalent units of production, one must be able to reasonably estimate: A. The percentage of completion. B. Units completed. C. Units started and completed. D. Direct labor cost. E. Materials cost.

Q: In a process costing system, when manufacturing overhead costs are applied to the cost of production, they are debited to: A. the Finished Goods Inventory account. B. the Cost of Goods Sold account. C. the Goods in Process Inventory account. D. the Manufacturing Overhead account. E. the Raw Materials Inventory account.

Q: After posting all actual factory overhead and applying factory overhead to production departments in a process costing system, A. There will never be underapplied overhead. B. There will never be overapplied overhead. C. There will always be underapplied overhead. D. There will always be overapplied overhead. E. There may be over or underapplied overhead.

Q: In a process operation, the direct labor of a production department includes: A. All labor used exclusively by that department, even if the labor is not applied to the product itself. B. All labor used exclusively by that department, but only if the labor is applied to the product itself. C. All labor for that department, including labor for services that help more than one production department, such as clerical, repair, and computer technicians. D. Only labor that helps more than one production department, such as clerical, repair, and computer technicians. E. Only that labor that is recorded in the Factory Payroll account.

Q: Direct labor and indirect labor are recorded, respectively, to: A. Factory Overhead and Goods in Process Inventory. B. Goods in Process Inventory and Finished Goods Inventory. C. Finished Goods Inventory and Goods in Process Inventory. D. Goods in Process Inventory and Factory Overhead. E. Cost of Goods Sold and Finished Goods Inventory.

Q: When raw materials are purchased on account for use in a process costing system, the corresponding journal entry that should be recorded will include: A. A debit to Goods in Process Inventory. B. A debit to Accounts Payable. C. A credit to Cash. D. A debit to Raw Materials Inventory. E. A credit to Raw Materials Inventory.

Q: The purchase of raw materials on account in a process costing system is recorded with a: A. Debit to Purchases and credit to Cash. B. Debit to Purchases and a credit to Accounts Payable. C. Debit to Raw Materials Inventory and a credit to Accounts Payable. D. Debit to Accounts Payable and a credit to Raw Materials Inventory. E. Debit to Goods in Process Inventory and a credit to Accounts Payable.

Q: In a process cost accounting system, direct material costs incurred are recorded: A. Indirectly to a Goods in Process Inventory account. B. Indirectly to a Finished Goods Inventory account. C. Directly to a Goods in Process Inventory account. D. Directly to a Finished Goods Inventory account. E. Directly to a Cost of Goods Sold account.

Q: A hybrid costing system would be most appropriate when: A. A manufacturer is able to standardize processes while at the same time attempting to meet individual customer needs. B. Large quantities of identical products are being produced. C. The volume of production is low and costs are high. D. There is no standardization of units of production. E. All of the choices would necessitate a hybrid costing system.

Q: An organizational unit of a factory that has the responsibility for partially manufacturing or producing a product is called a: A. Production department. B. Service department. C. Primary department. D. Responsibility department. E. Control department.

Q: A company that applies process costing is most frequently characterized by: A. Low standardization and high production volume. B. Custom orders and homogeneous products. C. Repetitive production and heterogeneous products. D. Repetitive production and low production volume. E. Homogeneous product and high production volume.

Q: A system of accounting in which the costs of each process are accumulated and then assigned to the units of product that passed through the process is a: A. General cost accounting system. B. Process cost accounting system. C. Job order cost accounting system. D. Manufacturing cost accounting system. E. Goods in process accounting system.

Q: The following data are available for a company's manufacturing activities: Beginning goods in process inventory.................................................................... 5,000 units, 1/4 of the labor added this period Units started and completed ............................................................ . 15,000 Ending goods in process inventory .................................................................... 6,000 units, 1/2 of the labor added this period If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively using the FIFO method of process costing? A. 16,250; 19,250. B. 16,250; 21,750. C. 21,000; 19,250. D. 19,250; 18,750. E. 21,000; 22,250.

Q: Aniston Enterprises manufactures stylish hats for sophisticated women. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows. Goods in Process, May 1 (50,000 units, 100% complete for direct materials, 40% complete with respect to direct labor and overhead; includes $70,500 of direct material cost; $34,050 of conversion costs). Units started in May 225,000 Units completed in May 200,000 Goods in Process, May 31 (75,000 units, 100% complete for direct materials; 20% complete for conversion costs). Costs incurred in May Direct materials $342,000 Conversion costs $352,950 If Aniston Enterprises uses the FIFO method of process costing, compute the equivalent units for materials and conversion costs respectively for May. A. 225,000; 225,000. B. 200,000; 195,000 C. 275,000; 200,000 D. 225,000; 195,000 E. 200,000; 200,000

Q: Aniston Enterprises manufactures stylish hats for sophisticated women. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows. Goods in Process, May 1 (50,000 units, 100% complete for direct materials, 40% complete with respect to direct labor and overhead (conversion costs); includes $70,500 of direct material cost; $34,050 of conversion costs). Units started in May 225,000 Units completed in May 200,000 Goods in Process, May 31 (75,000 units, 100% complete for direct materials; 20% complete for conversion costs). Costs incurred in May Direct materials $342,000 Conversion costs $352,950 If Aniston Enterprises uses the FIFO method of process costing, compute the cost per equivalent unit for direct materials and conversion costs respectively for May. A. $1.52; $1.81. B. $1.50; $1.76. C. $1.83; $1.72. D. $1.71; $1.81. E. $3.30; $3.30.

Q: A process cost summary is a managerial accounting report that describes: A. The costs charged to a department. B. The equivalent units of production by the department. C. How the costs were assigned to the output. D. Physical transfers for a department. E. All of the options are correct.

Q: A company uses a process cost accounting system. Its Sewing Department completed and transferred out 120,000 units during the current period. The ending inventory in the Sewing Department consists of 40,000 units (20% complete with respect to direct materials and 60% complete with respect to direct labor). Overhead is applied on the basis of direct labor. Determine the equivalent units of production for the Sewing Department for direct materials, direct labor and overhead assuming the weighted average method. A. 120,000; 120,000; 120,000 B. 120,000; 160,000; 120,000 C. 128,000; 120,000; 120,000 D. 128,000; 144,000; 144,000 E. 128,000; 184,000; 160,000

Q: Medina Corp. uses the weighted average method for inventory costs and had the following information available for the year. Equivalent units of production for the year are: Beginning inventory of goods in process (40% complete, $1,100) 200 units Ending inventory of goods in process (80% complete).. 400 units Total units started during the year.. 3,200 units A. 3,200 units. B. 3,320 units. C. 3,240 units. D. 3,520 units. E. 3,800 units.

Q: Medina Corp. uses the weighted average method for inventory costs and had the following information available for the year. The number of units transferred to finished goods during the year is: 200 units 400 units 3,200 units Beginning inventory of goods in process (40% complete, $1,100) Ending inventory of goods in process (80% complete)............................................................. Total units started during the year............................................................. A. 3,200 units. B. 3,000 units. C. 3,400 units. D. 3,160 units. E. 3,500 units.

Q: A company uses the weighted average method for inventory costing. During a period, Department A finished and transferred 50,000 units to Department B. Also, during the period, 10,000 units were started but brought only to a stage of being 3/5 completed. The number of equivalent units produced by Department A during the period was: A. 44,000 units. B. 50,000 units. C. 54,000 units. D. 56,000 units. E. 60,000 units.