Exam 20: Process Cost Accounting

A company's January 1 Work 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 30% complete.Calculate the equivalent units of production for the year using the FIFO method.

In a process operation,the direct labor of a production department includes:

The cost of units transferred from Work in Process Inventory to Finished Goods Inventory is called the cost of goods manufactured.

Equivalent units of production are always the same as the total number of physical units finished during the period.

If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor,it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them.

The combined costs of direct labor and factory overhead per equivalent unit used by many businesses with process operations is called:

Yamada Company applies factory overhead to its production departments on the basis of 90% of direct labor costs.In the Assembly Department,Yamada had $125,000 of direct labor cost,and in the Finishing Department,Yamada had $35,000 of direct labor cost.The entry to apply overhead to these production departments is:

Dazzle,Inc.produces beads for jewelry making use.The following information summarizes production operations and sales activities for June.The journal entry to record June sales is:

The third step in accounting for production activity in a period,before assigning and reconciling costs,is to compute the ______________________.

Sutton Company uses a process costing system.In May,80,000 units were finished and transferred to finished goods.Ending Work in Process included 20,000 unfinished units 30% complete.Calculate the equivalent units of production for the year using the weighted average method.

Which of the following characteristics applies to process costing but not to job order cost accounting?

The number of equivalent units of production assigned to ending Work in Process inventory should be equal to or less than the number of physical units in ending Work in Process inventory.

A unique feature of process costing systems is the use of a single Work in Process Inventory account regardless of the number of production departments that exist.

Process costing is applied to operations with repetitive production and customized products.

During July,the production department of a process operations system completed and transferred to finished goods 10,000 units that were in process at the beginning of July and 76,000 that were started and completed in July.July's beginning inventory units were 100% complete with respect to materials and 30% complete with respect to labor.At the end of July,15,000 additional units were in process in the production department and were 100% complete with respect to materials and 25% complete with respect to labor.The beginning inventory included labor cost of $52,100 and the production department incurred direct labor cost of $450,750 during July.Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

During March,the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 units that were started and completed in March.March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion.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 conversion.Compute the number of physical units transferred to finished goods.

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. If the units completed were transferred to the Labeling Department,what is the appropriate journal entry to transfer the direct materials?

In a process costing system,the purchase of raw materials is credited to the Raw Materials Inventory.

Bagger,Inc.uses a process costing system.The following operating and cost data occurred during October: 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.

Which of the following characteristics does not usually apply to process operations systems?