Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the FIFO method of inventory costing. \[\begin{array} { l | l | l } & \begin{array} { l } \text { Equivalent } \\ \text { Units } \end{array} & \begin{array} { l } \text { Total } \\ \text { Cost } \end{array} \\ \hline \text { Beginning Work in Process: } & & \\ \hline \text { Costs from prior month } & & \$ 7,000 \\ \hline \text { Materials added } & 300 & \\ \hline \text { Labor and overhead added } & 375 & \\ \hline \text { Started and completed goods: } & & \\ \hline \text { Materials added } & 2,000 & \\ \hline \text { Labor and overhead added } & 2,000 & \\ \hline \text { Ending Work in Procest: } & & \\ \hline \text { Materials added } & 320 & \\ \hline \text { Labor and overhead added } & 360 & \end{array}\] The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the ending Work in Process inventory for August.

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

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for goods transferred from production to finished goods is: $\begin{array} { | l | r | } \hline \text { Direct materials used } & \$ 87,000 \\ \hline \text { Direct labor used } & 160,000 \\ \hline \text { Predetermined overhead rate (based on direct labor) } & 155 \% \\ \hline \text { Goods transferred to finished goods } & 432,000 \\ \hline \text { Cost of goods sold } & 444,000 \\ \hline \text { Credit sales } & 810,000 \\ \hline \end{array}$

A) Debit Work in Process Inventory $432,000; credit Cash $432,000. B) Debit Work in Process Inventory $444,000; credit Finished Goods Inventory $444,000. C) Debit Finished Goods Inventory $444,000; credit Work in Process Inventory $444,000. D) Debit Work in Process Inventory $432,000; credit Finished Goods Inventory $432,000. E) Debit Finished Goods Inventory $432,000; credit Work in Process Inventory $432,000. A) Debit Work in Process Inventory $432,000; credit Cash $432,000. B) Debit Work in Process Inventory $444,000; credit Finished Goods Inventory $444,000. C) Debit Finished Goods Inventory $444,000; credit Work in Process Inventory $444,000. D) Debit Work in Process Inventory $432,000; credit Finished Goods Inventory $432,000. E) Debit Finished Goods Inventory $432,000; credit Work in Process Inventory $432,000.

Exam 20: Process Costing

Sparky Corporation uses the weighted-average 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 equivalent units of conversion.

(Multiple Choice)

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Question 141

At the beginning of the month, the Forming Department of Martin Manufacturing had 10,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion. During the month the department started 60,000 units and transferred 62,000 units to the next manufacturing department. At the end of the month, the department had 8,000 units in inventory, 80% complete as to materials and 60% complete as to conversion. - How many units did the Forming Department start and complete in the current month?

(Multiple Choice)

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Question 142

A company uses a process costing system. Its Assembly Department's beginning inventory consisted of 30,000 units, 75% complete with respect to direct labor and overhead. The department completed and transferred out 127,500 units this period. The ending inventory consists of 20,000 units that are 25% 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:

(Multiple Choice)

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Question 143

The process cost summary presents calculations of the cost of units completed during the reporting period, but does not present any information about the ending Work in Process inventory.

(True/False)

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Question 144

Grayson Company had 8,700 units in beginning inventory with accumulated costs for direct materials of $17,900, $16,500 direct labor, and $13,200 of overhead. During July, the company completed and transferred 50,000 units to finished goods. Costs incurred in the current period included $45,000 of direct materials, $58,500 of direct labor, and $46,800 of factory overhead. Ending inventory consisted of 12,000 units which were 90% complete with respect to materials and 50% complete with respect to labor and overhead. Compute the value assigned to ending inventory based on the weighted average method of inventory costing.

(Essay)

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Question 145

Wilturner Company incurs $97,000 of labor related directly to the product in the Assembly Department, and $10,000 of labor for services that help production in both the Assembly and Finishing departments. The amount of direct labor and factory overhead respectively are:

(Multiple Choice)

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Question 146

Match the following terms with the definitions

Equivalent units of production

Costing system that measures costs per unit upon completion of a job.

Job order costing system

Document that summarizes the materials a department uses when inventory moves continuously through the manufacturing process during a reporting period; replaces materials requisition.

Hybrid costing system

Report of total costs charged to a department, describes its equivalent units of production achieved, and allocates costs among units worked on in the period.

Correct Answer:

Verified

Equivalent units of production

Job order costing system

Hybrid costing system

Process operations

Process costing system

Materials consumption report

Process cost summary

(Matching)

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Question 147

Port Manufacturing Company uses a process costing system. Materials are added at the beginning of the process. Direct labor and overhead are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing. The following are the operating and cost data information for October. The October 1 beginning Work in Process Inventory consisted of 20,000 units. The costs for this inventory are $82,500 of direct materials, $24,400 of direct labor, and $48,800 of factory overhead. Factory overhead is applied at 200% of direct labor cost. In addition to the beginning inventory costs, the company issued the following costs into Work in Process Inventory; direct materials, $240,000; direct labor, $68,000; factory overhead, $136,000. During October, the company completed and transferred 60,000 units of its product to finished goods. At the end of the month, the Work in Process inventory consisted of 15,000 units that were 40% complete with respect to direct labor and factory overhead and 100% complete with respect to materials. Prepare the company's process cost summary for October using the weighted average method.

(Essay)

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Question 148

When raw materials are purchased on account for use in a process costing system, the corresponding journal entry that should be recorded will include:

(Multiple Choice)

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Question 149

The FIFO method of computing equivalent units includes the beginning inventory costs in computing the cost per equivalent unit for the current period.

(True/False)

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Question 150

Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the FIFO method of inventory costing. Equivalent Units Total Cost Beginning Work in Process: Costs from prior month \ 7,000 Materials added 300 Labor and overhead added 375 Started and completed goods: Materials added 2,000 Labor and overhead added 2,000 Ending Work in Procest: Materials added 320 Labor and overhead added 360 The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the ending Work in Process inventory for August.

(Essay)

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Question 151

At the beginning of the month, the Forming Department of Martin Manufacturing had 10,000 units in inventory, 30% complete as to materials, and 10% complete as to conversion. During the month the department started 60,000 units and transferred 62,000 units to the next manufacturing department. At the end of the month, the department had 8,000 units in inventory, 80% complete as to materials and 60% complete as to conversion. If Martin Manufacturing uses the weighted average method of process costing, compute the equivalent units for materials and conversion respectively for the Forming Department.

(Multiple Choice)

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Question 152

Refer to the following information about the Shaping Department of the Minnesota Factory for the month of August. Minnesota Factory uses the FIFO method of inventory costing. Equivalent Units Total Cost Beginning Work in Process: Costs from prior month \ 7,000 Materials added 300 Labor and overhead added 375 Started and completed goods: Materials added 2,000 Labor and overhead added 2,000 Ending Work in Process: Materials added 320 Labor and overhead added 360 The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the beginning units that were completed and transferred during August.

(Essay)

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Question 153

If a production department has 100 equivalent units of production with respect to direct materials in a given reporting period, the equivalent units of production with respect to direct labor must also be 100.

(True/False)

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Question 154

A company that applies process costing is most frequently characterized by:

(Multiple Choice)

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Question 155

A company uses a process costing system and the weighted average method for inventory costs. The following information is available regarding direct Work in Process, January 1 5,500 units, 80\% complete Work in Process, December 31 8,800 units, 40\% complete Units completed and transferred to finished goods 46,900 units Direct labor costs during the year \ 266,300 (a) Calculate the equivalent units of production for direct labor for the year. (b) Calculate the average cost per equivalent unit for direct labor (round to the nearest cent).

(Essay)

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Question 156

Process costing typically uses only one Work in Process Inventory account, while job order costing typically uses a separate Work in Process Inventory account for each department.

(True/False)

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Question 157

A company's beginning Work in Process inventory consisted of 20,000 units that were 20% complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were 40% complete at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

(Multiple Choice)

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Question 158

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for goods transferred from production to finished goods is: Direct materials used \ 87,000 Direct labor used 160,000 Predetermined overhead rate (based on direct labor) 155\% Goods transferred to finished goods 432,000 Cost of goods sold 444,000 Credit sales 810,000

(Multiple Choice)

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Question 159

To compute equivalent units of production, one must be able to reasonably estimate:

(Multiple Choice)

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Question 160

The process cost summary presents calculations of the cost of units completed during the reporting period, but does not present any information about the ending Work in Process inventory.

Wilturner Company incurs $97,000 of labor related directly to the product in the Assembly Department, and $10,000 of labor for services that help production in both the Assembly and Finishing departments. The amount of direct labor and factory overhead respectively are:

When raw materials are purchased on account for use in a process costing system, the corresponding journal entry that should be recorded will include:

The FIFO method of computing equivalent units includes the beginning inventory costs in computing the cost per equivalent unit for the current period.

If a production department has 100 equivalent units of production with respect to direct materials in a given reporting period, the equivalent units of production with respect to direct labor must also be 100.

A company that applies process costing is most frequently characterized by:

Process costing typically uses only one Work in Process Inventory account, while job order costing typically uses a separate Work in Process Inventory account for each department.

To compute equivalent units of production, one must be able to reasonably estimate:

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

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