Question 1

The FIFO method separates prior period costs from costs incurred during the current period.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) 3,200 units. 
B) 3,320 units. 
C) 3,240 units. 
D) 3,520 units. 
E) 3,800 units. 
A) 3,200 units. 
B) 3,320 units. 
C) 3,240 units. 
D) 3,520 units. 
E) 3,800 units.

Question 3

A company uses a process cost accounting system.Its Assembly Department's beginning inventory consisted of 50,000 units,3/4 complete with respect to direct labor and overhead.The department completed and transferred out 127,500 units this period.The ending inventory consists of 40,000 units that are 1/4 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 $24,000 and overhead costs of $32,000 for the period.Assuming the weighted average method,the direct labor cost per equivalent unit (rounded to the nearest cent)is:

Accepted Answer

A) $0.14. 
B) $0.16. 
C) $0.17. 
D) $0.30. 
E) $0.37. 
A) $0.14. 
B) $0.16. 
C) $0.17. 
D) $0.30. 
E) $0.37.

Question 4

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:
   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.

Accepted Answer

The answer of Refer to the following information about the...

Question 5

Equivalent units of production need to be determined only if a processing department adds materials and labor to its products at different rates.

Accepted Answer

A) True 
 B)False

Question 6

Process cost accounting systems consider direct costs to include those costs that can be readily identified with a particular process.

Accepted Answer

A) True 
 B)False

Question 7

In a process cost accounting system,a department's production should be measured in terms of equivalent units when its beginning or ending inventory includes goods in process.

Accepted Answer

A) True 
 B)False

Question 8

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.

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 9

Which of the following is the best explanation for why it is necessary to calculate equivalent units of production in a process costing environment?

Accepted Answer

A) In most manufacturing environments, it is not possible to conduct a physical count of units. 
B) Companies often use a combination of a process costing and job order costing systems. 
C) In most process costing systems, direct materials are added at the beginning of the process while conversion costs are added evenly throughout the manufacturing process. 
D) All of the work to make a unit 100% complete and ready to move to the next stage of production or to finished goods inventory may not have been completed in a single time period. 
E) In most cases, there is no difference between physical units and equivalent units of production. 
A) In most manufacturing environments, it is not possible to conduct a physical count of units. 
B) Companies often use a combination of a process costing and job order costing systems. 
C) In most process costing systems, direct materials are added at the beginning of the process while conversion costs are added evenly throughout the manufacturing process. 
D) All of the work to make a unit 100% complete and ready to move to the next stage of production or to finished goods inventory may not have been completed in a single time period. 
E) In most cases, there is no difference between physical units and equivalent units of production.

Question 10

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

Accepted Answer

A) Each unit of product is separately identifiable. 
B) Partially completed products are transferred between processes. 
C) Different managers are responsible for different processes. 
D) The output of all processes except the final process is an input to the next process. 
E) All of the choices include characteristics of process manufacturing systems. 
A) Each unit of product is separately identifiable. 
B) Partially completed products are transferred between processes. 
C) Different managers are responsible for different processes. 
D) The output of all processes except the final process is an input to the next process. 
E) All of the choices include characteristics of process manufacturing systems.

Question 11

When the completed goods are sold,the cost of the completed goods are transferred to ____________________ .

Accepted Answer

The answer of When the completed goods are sold,the cost...

Question 12

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:

Accepted Answer

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. 
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.

Question 13

Process manufacturing usually reflects a manufacturer that produces large quantities of identical products.

Accepted Answer

A) True 
 B)False

Question 14

In a process costing system,when manufacturing overhead costs are applied to the cost of production,they are debited to:

Accepted Answer

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. 
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.

Question 15

A process cost accounting system records all factory overhead costs directly in the Goods in Process Inventory accounts.

Accepted Answer

A) True 
 B)False

Question 16

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:

Accepted Answer

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. 
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.

Question 17

The following data is available for Osman Corp.for the current year:
Beginning inventory of goods in process 12,000 units,60% completed
Ending inventory of goods in process 18,000 units,30% completed
Units completed and transferred to
finished goods during the year 144,000 units
Calculate the equivalent units of production for the year using the weighted average method.

Accepted Answer

The answer of The following data is available for Osman...

Question 18

Heesacker,Inc.uses a process cost accounting 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.

Accepted Answer

The answer of Heesacker,Inc.uses a process cost accounting system.The following...

Question 19

The use of process costing is of little benefit to a service type of operation.

Accepted Answer

A) True 
 B)False

Question 20

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.March's 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.

Accepted Answer

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. 
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.

The FIFO method separates prior period costs from costs incurred during the current period.

Equivalent units of production need to be determined only if a processing department adds materials and labor to its products at different rates.

Process cost accounting systems consider direct costs to include those costs that can be readily identified with a particular process.

In a process cost accounting system,a department's production should be measured in terms of equivalent units when its beginning or ending inventory includes goods in process.

Which of the following is the best explanation for why it is necessary to calculate equivalent units of production in a process costing environment?

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

When the completed goods are sold,the cost of the completed goods are transferred to ____________________ .

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:

Process manufacturing usually reflects a manufacturer that produces large quantities of identical products.

In a process costing system,when manufacturing overhead costs are applied to the cost of production,they are debited to:

A process cost accounting system records all factory overhead costs directly in the Goods in Process Inventory accounts.

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:

The use of process costing is of little benefit to a service type of operation.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

Filters

Exam 20: Process Costing

The FIFO method separates prior period costs from costs incurred during the current period.

Equivalent units of production need to be determined only if a processing department adds materials and labor to its products at different rates.

Process cost accounting systems consider direct costs to include those costs that can be readily identified with a particular process.

In a process cost accounting system,a department's production should be measured in terms of equivalent units when its beginning or ending inventory includes goods in process.

Which of the following is the best explanation for why it is necessary to calculate equivalent units of production in a process costing environment?

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

When the completed goods are sold,the cost of the completed goods are transferred to ____________________ .

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:

Process manufacturing usually reflects a manufacturer that produces large quantities of identical products.

In a process costing system,when manufacturing overhead costs are applied to the cost of production,they are debited to:

A process cost accounting system records all factory overhead costs directly in the Goods in Process Inventory accounts.

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:

The use of process costing is of little benefit to a service type of operation.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

Filters