Question 1

What is true concerning an ABC philosophy?

Accepted Answer

A)  Costs should be applied using one activity level for simplicity. 
B)  Each overhead cost should respond proportionally to changes in the activity level of its cost driver. 
C)  One best cost driver should be selected. 
D)  No work in process inventories should be used. 
A)  Costs should be applied using one activity level for simplicity. 
B)  Each overhead cost should respond proportionally to changes in the activity level of its cost driver. 
C)  One best cost driver should be selected. 
D)  No work in process inventories should be used.

Question 2

Sanders Company has two production departments: Fabricating and Finishing. Beginning inventories are: Work in Process-Fabricating, $6,030; Work in Process-Finishing, $4,100; and Finished Goods, $5,600. During the month the following transactions occurred:
1. Purchased $40,000 of raw materials on account.
2. Incurred $65,000 of factory labor. Wages are unpaid.
3. Incurred $35,000 of manufacturing overhead; $30,000 was paid and the remainder is unpaid.
4. Requisitioned materials for Fabricating, $10,000 and Finishing, $8,000.
5. Used factory labor for Finishing, $52,000 and Fabricating, $13,000.
6. Applied $30,000 of overhead based on machine hours used in each department. The Finishing Department used twice as many machine hours as did Fabricating.
Instructions
Journalize the transactions for the month.

Accepted Answer

The answer of Sanders Company has two production departments: Fabricating...

Question 3

Under ABC, costs are traced from ________________ to products.

Accepted Answer

The answer of Under ABC, costs are traced from ________________...

Question 4

White Supplies' total material costs are $50,000 and total conversion costs are $65,000. Equivalent units of production for materials are 10,000, and 5,000 for conversion costs.
Instructions
Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month.

Accepted Answer

The answer of White Supplies' total material costs are $50,000...

Question 5

Which of the following is a limitation of activity-based costing?

Accepted Answer

A)  More cost bases. 
B)  Less control over overhead costs. 
C)  Poorer management decisions. 
D)  Some arbitrary allocations continue. 
A)  More cost bases. 
B)  Less control over overhead costs. 
C)  Poorer management decisions. 
D)  Some arbitrary allocations continue.

Question 6

A cost reconciliation schedule is prepared to assign total costs to units ______________, and to the units in the _________________ work in process.

Accepted Answer

transferre

Question 7

In a process cost system, labor costs incurred maybe captured on time tickets.

Accepted Answer

A) True 
 B)False

Question 8

Which of these best reflects a distinguishing factor between a job order cost system and a process cost system?

Accepted Answer

A)  The detail at which costs are calculated. 
B)  The time period each covers. 
C)  The number of work in process accounts. 
D)  The manufacturing cost elements included. 
A)  The detail at which costs are calculated. 
B)  The time period each covers. 
C)  The number of work in process accounts. 
D)  The manufacturing cost elements included.

Question 9

One similarity of process cost accounting with job order cost accounting is that both determine total manufacturing costs after each job.

Accepted Answer

A) True 
 B)False

Question 10

Romero Company-Perth Division is a new state of the art production facility that manufactures landing gears for airplanes. The ending September 30th work in process is comprised of labor and overhead and is approximately 60% complete. All materials are assumed to be 100% complete. Total materials costs during the period totaled $840,000.
Instructions
As the new plant accountant, you are asked to complete the production cost report which appears as follows:

Accepted Answer

The answer of Romero Company-Perth Division is a new state...

Question 11

Mayer Manufacturing Company uses a process cost system. The Molding Department adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process. Work in process on May 1 was 75% complete and work in process on May 31 was 40% complete.
Instructions
Complete the Production Cost Report for the Molding Department for the month of May using the above information and the information below.

Accepted Answer

The answer of Mayer Manufacturing Company uses a process cost...

Question 12

Fewer materials requisitions are generally required in a process cost system than in a job order cost system.

Accepted Answer

A) True 
 B)False

Question 13

A process began the month with 3,000 units in the beginning work in process inventory and ended the month with 2,000 units in the ending work in process. If 12,000 units were completed and transferred out of the process during the month, how many units were started into production during the month?

Accepted Answer

A)  11,000. 
B)  13,000. 
C)  12,000. 
D)  10,000. 
A)  11,000. 
B)  13,000. 
C)  12,000. 
D)  10,000.

Question 14

If equivalent units are 9,000 for conversion costs and units transferred out equals 6,000, what stage of completion should the ending work in process be for the 12,000 units remaining?

Accepted Answer

A)  75%. 
B)  25%. 
C)  10%. 
D)  20%. 
A)  75%. 
B)  25%. 
C)  10%. 
D)  20%.

Question 15

Apoly Manufacturing Company has the following production data for January.   
Instructions
Compute the physical units for January.

Accepted Answer

The answer of Apoly Manufacturing Company has the following production...

Question 16

When there is no beginning work in process and materials are entered at the beginning of the process, equivalent units of materials are the same as the units started into production.

Accepted Answer

A) True 
 B)False

Question 17

If there are no units in process at the beginning of the period, then

Accepted Answer

A)  the company must be using a job order cost system. 
B)  only one computation of equivalent units of production will be necessary. 
C)  the units started into production will equal the number of units transferred out. 
D)  the units to be accounted for will equal the units transferred out and the units in process at the end of the period. 
A)  the company must be using a job order cost system. 
B)  only one computation of equivalent units of production will be necessary. 
C)  the units started into production will equal the number of units transferred out. 
D)  the units to be accounted for will equal the units transferred out and the units in process at the end of the period.

Question 18

Physical units are 80,000. Total conversion costs are $276,500. There are 2,000 units in ending inventory which are 50% complete as to conversion costs. How much is the conversion cost per unit?

Accepted Answer

A)  $3.50. 
B)  $3.46. 
C)  $3.42. 
D)  $3.37. 
A)  $3.50. 
B)  $3.46. 
C)  $3.42. 
D)  $3.37.

Question 19

In activity-based costing, the focus is on the activities performed to produce specific products.

Accepted Answer

A) True 
 B)False

Question 20

Byers Company had the following department information for the month:   What is the total manufacturing cost per unit?

Accepted Answer

A)  $6.40. 
B)  $6.00. 
C)  $7.20. 
D)  $13.20. 
A)  $6.40. 
B)  $6.00. 
C)  $7.20. 
D)  $13.20.

Exam 21: Process Costing

What is true concerning an ABC philosophy?

Under ABC, costs are traced from ________________ to products.

White Supplies' total material costs are $50,000 and total conversion costs are $65,000. Equivalent units of production for materials are 10,000, and 5,000 for conversion costs. Instructions Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month.

Which of the following is a limitation of activity-based costing?

A cost reconciliation schedule is prepared to assign total costs to units ______________, and to the units in the _________________ work in process.

In a process cost system, labor costs incurred maybe captured on time tickets.

Which of these best reflects a distinguishing factor between a job order cost system and a process cost system?

One similarity of process cost accounting with job order cost accounting is that both determine total manufacturing costs after each job.

Fewer materials requisitions are generally required in a process cost system than in a job order cost system.

A process began the month with 3,000 units in the beginning work in process inventory and ended the month with 2,000 units in the ending work in process. If 12,000 units were completed and transferred out of the process during the month, how many units were started into production during the month?

If equivalent units are 9,000 for conversion costs and units transferred out equals 6,000, what stage of completion should the ending work in process be for the 12,000 units remaining?

Apoly Manufacturing Company has the following production data for January. Instructions Compute the physical units for January.

When there is no beginning work in process and materials are entered at the beginning of the process, equivalent units of materials are the same as the units started into production.

If there are no units in process at the beginning of the period, then

Physical units are 80,000. Total conversion costs are $276,500. There are 2,000 units in ending inventory which are 50% complete as to conversion costs. How much is the conversion cost per unit?

In activity-based costing, the focus is on the activities performed to produce specific products.

Byers Company had the following department information for the month: What is the total manufacturing cost per unit?

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Filters

A cost reconciliation schedule is prepared to assign total costs to units , and to the units in the ___ work in process.