Question 1

In a process costing system, factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

Accepted Answer

A) True 
 B)False

Question 2

In a process costing accounting system, factory wages are debited to ________, when direct labor is used. When indirect labor is used, the ________ account is debited. In both cases the ________ is credited.

Accepted Answer

Work in Process; Fac

Question 3

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.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing Department: $\begin{array}{lr}
\text { Equivalent units of production-direct materials } & 110,000 \mathrm{EUP} \
\text { Equivalent units of production conversion } & 95,000 \mathrm{EUP}\
\text { Costs in beginning Work in Process-direct materials } & \$ 49,000 \
\text { Costs in beginning Work in Process conversion } & \$ 36,000 \
\text { Costs incurred in February-direct materials } & \$ 414,000 \
\text { Costs incurred in Febuary-conversion } & 520.000
\end{array}$
- 
The cost per equivalent unit of production for direct materials is:

Accepted Answer

A)  $5.05 
B)  $4.21 
C)  $5.85 
D)  $4.97 
E)  $9.26 
A)  $5.05 
B)  $4.21 
C)  $5.85 
D)  $4.97 
E)  $9.26

Question 6

The following table of cost information is available for the Renaldo Company for the month of November:
 $$\begin{array} { l | l | l | l } 
& \begin{array} { l } 
\text { Goods in } \
\text { Process } \
\text { Inventory- } \
\text { Mixing }
\end{array} & \begin{array} { l } 
\text { Goods in } \
\text { Process } \
\text { Inventory- } \
\text { Molding }
\end{array} & \begin{array} { l } 
\text { Finithed } \
\text { Goods } \
\text { Inventory }
\end{array} \
\hline \text { Begining Inventory } & \$ 12,000 & \$ 15,000 & \$ 24,000 \
\hline \text { Costs incurred: } & & & \
\hline \text { Direct materials } & 22,000 & 14,000 & \
\hline \text { Direct labor } & 32,000 & 17,000 & \
\hline \text { Overhead applied } & 47,000 & 24,500 & \
\hline \text { Costs transferred out } & ( 100,000 ) & ( 152,000 ) & \
\hline \text { Costs transferred in } & & 100,000 & 152,000 \
\hline \text { Cost f goods sold } & & & ( 149,000 ) \
\hline \text { Ending inventory } & 13,000 & 18,500 & 27,000
\end{array}$$ 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.

Accepted Answer

a. Finished Goods Inventory 15

Question 7

A process cost summary usually does not include the number of equivalent units of production for the period.

Accepted Answer

A) True 
 B)False

Question 8

Conversion cost per equivalent unit is the combined costs of direct labor and factory overhead.

Accepted Answer

A) True 
 B)False

Question 9

During November, the production department of a process operations system completed and transferred to finished goods 35,000 units that were in process at the beginning of November and 110,000 that were started and completed in November. November's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. At the end of November, 40,000 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 equivalent units with respect to conversion for November using the weighted-average method.

Accepted Answer

A)  157,000. 
B)  83,500. 
C)  55,500. 
D)  145,000. 
E)  185,000. 
A)  157,000. 
B)  83,500. 
C)  55,500. 
D)  145,000. 
E)  185,000.

Question 10

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:

Accepted Answer

A)  Debit Factory Overhead $144,000; credit Work in Process Inventory-Assembly $112,500; credit Work in Process-Finishing $31,500. 
B)  Debit Factory Overhead-Assembly $112,500; debit Factory Overhead-Finishing $31,500; credit Work in Process Inventory $144,000. 
C)  Debit Factory Payroll $144,000; credit Cash $144,000. 
D)  Debit Factory Overhead $144,000; credit Factory Payroll $144,000. 
E)  Debit Work in Process Inventory-Assembly $112,500; debit Work in Process Inventory -Finishing $31,500; credit Factory Overhead $144,000. 
A)  Debit Factory Overhead $144,000; credit Work in Process Inventory-Assembly $112,500; credit Work in Process-Finishing $31,500. 
B)  Debit Factory Overhead-Assembly $112,500; debit Factory Overhead-Finishing $31,500; credit Work in Process Inventory $144,000. 
C)  Debit Factory Payroll $144,000; credit Cash $144,000. 
D)  Debit Factory Overhead $144,000; credit Factory Payroll $144,000. 
E)  Debit Work in Process Inventory-Assembly $112,500; debit Work in Process Inventory -Finishing $31,500; credit Factory Overhead $144,000.

Question 11

One section of the process cost summary describes the equivalent units of production for the department during the reporting period and presents the calculations of the direct materials and conversion costs per equivalent unit.

Accepted Answer

A) True 
 B)False

Question 12

Metaline 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: $\begin{array} { l r r } 
\text { Beginning Work in Process } ( 40 \% \text { complete, } \$ 1,100 ) & 200 & \text { units } \
\text { Ending inventory of Work in Process } ( 80 \% \text { complete) } & 400 & \text { units } \
\text { Total units started during the year } & 320 & \text { units }
\end{array}$

Accepted Answer

A)  3,200 units. 
B)  3,400 units. 
C)  3,000 units. 
D)  3,500 units. 
E)  3,160 units. 
A)  3,200 units. 
B)  3,400 units. 
C)  3,000 units. 
D)  3,500 units. 
E)  3,160 units.

Question 13

In a process costing system, companies typically end each period with only Finished Goods Inventory.

Accepted Answer

A) True 
 B)False

Question 14

The FIFO method of computing equivalent units focuses on production activity in the current period only.

Accepted Answer

A) True 
 B)False

Question 15

Process operations, also called process manufacturing or process production, is the ________ production of similar products in a ________ flow of sequential steps.

Accepted Answer

The answer of Process operations, also called process manufacturing or...

Question 16

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.

Accepted Answer

The answer of If a process has ________ or ________...

Question 17

Pitt Enterprises manufactures jeans. 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. Work in Process, May 1 (50,000 units, 100% complete for direct materials, 40% complete with respect to conversion costs; includes $70,500 of direct material cost; $34,050 of conversion costs).
$\begin{array}{llr}
  \text {  Units started in May} &225,000\
 \text { Units completed in May } &200,000\
\end{array}$

Work 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 Pitt Enterprises uses the FIFO method of process costing, compute the equivalent units for direct materials and conversion respectively for May.

Accepted Answer

A)  225,000 materials; 195,000 conversion. 
B)  195,000 materials; 225,000 conversion. 
C)  275,000 materials; 215,000 conversion. 
D)  195,000 materials; 195,000 conversion. 
E)  150,000 materials; 150,000 conversion. 
A)  225,000 materials; 195,000 conversion. 
B)  195,000 materials; 225,000 conversion. 
C)  275,000 materials; 215,000 conversion. 
D)  195,000 materials; 195,000 conversion. 
E)  150,000 materials; 150,000 conversion.

Question 18

In process costing, the classification of materials as direct or indirect depends on whether or not they are clearly linked with a specific process or department.

Accepted Answer

A) True 
 B)False

Question 19

In a process operation, all labor that is used exclusively by a single production department is considered to be direct labor.

Accepted Answer

A) True 
 B)False

Question 20

Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department: Units:
Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion.
Units started and completed: 110,000.
Units completed and transferred out: 135,000.
Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $43,000. Costs in beginning Work in Process - Conversion: $48,850.
Costs incurred in February - Direct Materials: $287,000. Costs incurred in February - Conversion: $599,150.
-
Calculate the cost per equivalent unit of conversion.

Accepted Answer

A)  $4.60 
B)  $5.45 
C)  $4.16 
D)  $4.98 
E)  $4.50 
A)  $4.60 
B)  $5.45 
C)  $4.16 
D)  $4.98 
E)  $4.50

In a process costing system, factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

In a process costing accounting system, factory wages are debited to , when direct labor is used. When indirect labor is used, the account is debited. In both cases the is credited.

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.

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

A process cost summary usually does not include the number of equivalent units of production for the period.

Conversion cost per equivalent unit is the combined costs of direct labor and factory overhead.

One section of the process cost summary describes the equivalent units of production for the department during the reporting period and presents the calculations of the direct materials and conversion costs per equivalent unit.

In a process costing system, companies typically end each period with only Finished Goods Inventory.

The FIFO method of computing equivalent units focuses on production activity in the current period only.

Process operations, also called process manufacturing or process production, is the production of similar products in a flow of sequential steps.

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.

In process costing, the classification of materials as direct or indirect depends on whether or not they are clearly linked with a specific process or department.

In a process operation, all labor that is used exclusively by a single production department is considered to be direct labor.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

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

Present and Future Values in Accounting

Activity-Based Costing

Filters

Exam 20: Process Costing

In a process costing system, factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

In a process costing accounting system, factory wages are debited to ________, when direct labor is used. When indirect labor is used, the ________ account is debited. In both cases the ________ is credited.

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.

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

A process cost summary usually does not include the number of equivalent units of production for the period.

Conversion cost per equivalent unit is the combined costs of direct labor and factory overhead.

One section of the process cost summary describes the equivalent units of production for the department during the reporting period and presents the calculations of the direct materials and conversion costs per equivalent unit.

In a process costing system, companies typically end each period with only Finished Goods Inventory.

The FIFO method of computing equivalent units focuses on production activity in the current period only.

Process operations, also called process manufacturing or process production, is the ________ production of similar products in a ________ flow of sequential steps.

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.

In process costing, the classification of materials as direct or indirect depends on whether or not they are clearly linked with a specific process or department.

In a process operation, all labor that is used exclusively by a single production department is considered to be direct labor.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

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

Present and Future Values in Accounting

Activity-Based Costing

Filters

In a process costing accounting system, factory wages are debited to , when direct labor is used. When indirect labor is used, the account is debited. In both cases the is credited.

Process operations, also called process manufacturing or process production, is the production of similar products in a flow of sequential steps.

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.