Question 1

Operation-costing differs from pure process-costing in that operation-costing charges each work order separately for direct material cost.

Accepted Answer

A) True 
 B)False

Question 2

Marvin Ltd.uses an automated process in its manufacturing operations.On November 1, the company had 25,000 units in beginning work in process which were 80% complete with respect to conversion.During the month of November, it started 120,000 into production.On November 30, there were 20,000 units in process, which were 40% complete with respect to conversion.Direct materials are added at the beginning of the process, and no units are spoiled in production.The beginning inventory had direct materials costs of $105,750 and conversion costs of $45,500.During the month, the company issues $510,000 of direct materials and incurred $203,400 of conversion costs.Required:
Prepare a production cost worksheet using the FIFO method.

Accepted Answer

The answer of Marvin Ltd.uses an automated process in its...

Question 3

When there are insignificant amounts of beginning and ending inventory then the weighted-average and FIFO process costing methods will generate results that are not materially different.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following journal entries correctly reflects the transfer of goods completed from the Assembly Department to the Testing Department?

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 5

The weighted-average process costing method assigns the cost of the earliest equivalent units available to units completed and transferred out, and the cost of the most recent equivalent units worked on during the period to ending work-in-process inventory.

Accepted Answer

A) True 
 B)False

Question 6

Answer the following questions using the information below:
The Townsend Tractor Company manufactures small garden tractors on a highly automated assembly line.Its' costing system uses two cost categories, direct materials and conversion costs.Each tractor must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.Townsend Tractor uses weighted-average costing.  
-What amount of conversion costs are assigned to the Townsend Company ending Work-in-Process account for April?

Accepted Answer

A) $143,750.00 
B) $145,312.50 
C) $180,000.00 
D) $250,000.00 
E) $116,250.00 
A) $143,750.00 
B) $145,312.50 
C) $180,000.00 
D) $250,000.00 
E) $116,250.00

Question 7

Transferred-in costs incurred in a previous department and charged to a subsequent department

Accepted Answer

A) are combined with direct materials costs of the subsequent department for a total direct materials costs figure. 
B) are always from the previous period. 
C) become part of Cost of Goods Sold in the current period. 
D) are always assigned using the FIFO method. 
E) follow the physical movement of the units. 
A) are combined with direct materials costs of the subsequent department for a total direct materials costs figure. 
B) are always from the previous period. 
C) become part of Cost of Goods Sold in the current period. 
D) are always assigned using the FIFO method. 
E) follow the physical movement of the units.

Question 8

The final result of the process costing procedure is to compute the dollar amount of the credit to a work-in-process account and the corresponding debit to finished goods and/or other work-in-process accounts.

Accepted Answer

A) True 
 B)False

Question 9

Use the information below to answer the following question(s).Apex Disk Company operates a computer disk manufacturing plant.Direct materials are added at the end of the process.The following data were presented for August:
  
-Calculate equivalent units for direct materials at Apex Disk Company using the weighted-average method.

Accepted Answer

A) 100,000 units 
B) 350,000 units 
C) 400,000 units 
D) 450,000 units 
E) 499,000 units 
A) 100,000 units 
B) 350,000 units 
C) 400,000 units 
D) 450,000 units 
E) 499,000 units

Question 10

Use the information below to answer the following question(s).Apex Disk Company operates a computer disk manufacturing plant.Direct materials are added at the end of the process.The following data were presented for August:
  
-Calculate the equivalent units for conversion costs at Apex Disk Company using the weighted-average method.

Accepted Answer

A) 300,000 units 
B) 350,000 units 
C) 382,500 units 
D) 450,920 units 
E) 499,000 units 
A) 300,000 units 
B) 350,000 units 
C) 382,500 units 
D) 450,920 units 
E) 499,000 units

Question 11

The cost of units completed can differ materially between the weighted average and the FIFO methods of process costing.

Accepted Answer

A) True 
 B)False

Question 12

The Laramie Factory produces expensive boots.It has two departments that process all the items.During January, the beginning work in process in the tanning department was 40% complete as to conversion and 100% complete as to direct materials.The beginning inventory included $6,000 for materials and $18,000 for conversion costs.Ending work-in-process inventory in the tanning department was 40% complete.Direct materials are added at the beginning of the process.Beginning work in process in the finishing department was 60% complete as to conversion.Beginning inventories included $7,000 for transferred-in costs and $10,000 for conversion costs.Ending inventory was 30% complete.Additional information about the two departments follows:
   Required:
Prepare a production cost worksheet using weighted-average costing for the finishing department.

Accepted Answer

The answer of The Laramie Factory produces expensive boots.It has...

Question 13

Use the information below to answer the following question(s).Hollywood North Magic, a cosmetic manufacturer, began operations in January.During the first month of operations, $60,000 was incurred for direct materials and $80,000 was incurred for conversion costs.During January, 30,000 litres of cosmetics were started and 6,000 litres were unfinished at the end of the month.Ending work-in-process was 45% completed.All inputs are added evenly throughout the production process.
-Bag Company had a beginning inventory of 4,000 bags with costs of $18,000 on January 1.The direct materials were complete and all overhead had been assigned; however, only 40 percent of direct manufacturing labour was added in the prior period.Another 20,000 units were started and completed during the current period.Bag Company uses FIFO process-costing and calculated equivalent unit costs as follows: materials, $8.00; labour, $9.00; and overhead, $5.00.What is the total cost of goods transferred out using the FIFO method?

Accepted Answer

A) $440,000 
B) $468,000 
C) $470,000 
D) $491,600 
E) $519,500 
A) $440,000 
B) $468,000 
C) $470,000 
D) $491,600 
E) $519,500

Question 14

Which of the following is an error when accounting for transferred-in costs?

Accepted Answer

A) including transferred-in costs from previous departments 
B) costing units at average costs 
C) converting units to a common measurement when transferred in 
D) consider costs assigned at the beginning of the period when calculating costs to be transferred on a weighted average basis 
E) consider costs assigned at the beginning of the period when calculating costs to be transferred on a FIFO basis 
A) including transferred-in costs from previous departments 
B) costing units at average costs 
C) converting units to a common measurement when transferred in 
D) consider costs assigned at the beginning of the period when calculating costs to be transferred on a weighted average basis 
E) consider costs assigned at the beginning of the period when calculating costs to be transferred on a FIFO basis

Question 15

Answer the following questions using the information below:
Dustin Plastics, Inc., manufactures plastic moldings for car seats.Its costing system uses two cost categories, direct materials and conversion costs.Each product must pass through Department A and Department B.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production.Data for Department A for February 2018 are:
   Costs for the Department A for February 2018 are:
  
-What were the equivalent units of direct materials and conversion costs, respectively, for February? Assume Dustin Plastics, Inc., uses the weighted-average process costing method.

Accepted Answer

A) 800; 730 
B) 800; 800 
C) 800; 700 
D) 600; 500 
E) 700; 630 
A) 800; 730 
B) 800; 800 
C) 800; 700 
D) 600; 500 
E) 700; 630

Question 16

Use the information below to answer the following question(s).Hollywood North Magic, a cosmetic manufacturer, began operations in January.During the first month of operations, $60,000 was incurred for direct materials and $80,000 was incurred for conversion costs.During January, 30,000 litres of cosmetics were started and 6,000 litres were unfinished at the end of the month.Ending work-in-process was 45% completed.All inputs are added evenly throughout the production process.
-Which of the following items is not a component of "total costs to be accounted for in a given department's operations" when using process costing?

Accepted Answer

A) direct manufacturing labour used in the given department 
B) the cost of materials requisitioned and used by the given department 
C) transferred-in costs from the prior processing department 
D) transferred-out costs to the next department 
E) conversion costs 
A) direct manufacturing labour used in the given department 
B) the cost of materials requisitioned and used by the given department 
C) transferred-in costs from the prior processing department 
D) transferred-out costs to the next department 
E) conversion costs

Question 17

The following production-cost worksheet has been prepared for the month of December for Ag Chemical.     Assignment of costs:
   Work in process, ending:
   Required:
Prepare general journal entries for the following:
a.Record costs of materials put into process for December.
b.Record conversion costs put into process in December.
c.Record goods transferred-out to finished goods for December.

Accepted Answer

The answer of The following production-cost worksheet has been prepared...

Question 18

Use the information below to answer the following question(s).Carnival Furniture had 60,000 foam cushions in process at May 1 (70% converted)and 40,000 cushions in process at May 31 (50% converted).All direct materials are added at the beginning of the production process.During the month, 140,000 cushions were transferred to finished goods.
-What is the Carnival Furniture equivalent units for conversion costs for May using the weighted average method?

Accepted Answer

A) 180,000 cushions 
B) 160,000 cushions 
C) 140,000 cushions 
D) 118,000 cushions 
E) 123,000 cushions 
A) 180,000 cushions 
B) 160,000 cushions 
C) 140,000 cushions 
D) 118,000 cushions 
E) 123,000 cushions

Question 19

Lehman Pottery Company manufactures clay molded pottery on an assembly line.Its standard costing system uses two cost categories, direct materials and conversion costs.Each product must pass through the Assembly Department and the Finishing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.Data for the Assembly Department for August 2018 are:
       Costs for August:
     Required:
Prepare general journal entries to record:
1.The actual Assembly Department's conversion costs for the month assuming conversion costs are 10 percent higher than expected.2.The assignment of conversion costs to work-in-process inventory, and the conversion-cost variances of the Assembly Department assuming that conversion costs are 10 percent higher than expected.3.The direct materials requisitions for the work-in-process inventory and direct materials variances assuming that the Assembly department used 10 percent less materials than expected.

Accepted Answer

1. @#IMG-DLM& @#IMG-DLM& $44,550 × 1.10%

Question 20

Standard costing can be used in process costing systems.

Accepted Answer

A) True 
 B)False

Operation-costing differs from pure process-costing in that operation-costing charges each work order separately for direct material cost.

When there are insignificant amounts of beginning and ending inventory then the weighted-average and FIFO process costing methods will generate results that are not materially different.

Which of the following journal entries correctly reflects the transfer of goods completed from the Assembly Department to the Testing Department?

The weighted-average process costing method assigns the cost of the earliest equivalent units available to units completed and transferred out, and the cost of the most recent equivalent units worked on during the period to ending work-in-process inventory.

Transferred-in costs incurred in a previous department and charged to a subsequent department

The final result of the process costing procedure is to compute the dollar amount of the credit to a work-in-process account and the corresponding debit to finished goods and/or other work-in-process accounts.

The cost of units completed can differ materially between the weighted average and the FIFO methods of process costing.

Which of the following is an error when accounting for transferred-in costs?

Standard costing can be used in process costing systems.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Spoilage, Rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 17: Process Costing

Operation-costing differs from pure process-costing in that operation-costing charges each work order separately for direct material cost.

When there are insignificant amounts of beginning and ending inventory then the weighted-average and FIFO process costing methods will generate results that are not materially different.

Which of the following journal entries correctly reflects the transfer of goods completed from the Assembly Department to the Testing Department?

The weighted-average process costing method assigns the cost of the earliest equivalent units available to units completed and transferred out, and the cost of the most recent equivalent units worked on during the period to ending work-in-process inventory.

Transferred-in costs incurred in a previous department and charged to a subsequent department

The final result of the process costing procedure is to compute the dollar amount of the credit to a work-in-process account and the corresponding debit to finished goods and/or other work-in-process accounts.

The cost of units completed can differ materially between the weighted average and the FIFO methods of process costing.

Which of the following is an error when accounting for transferred-in costs?

Standard costing can be used in process costing systems.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Spoilage, Rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters