Question 1

Activity-based costing has more applicability in a process-costing system than in a job-costing environment.

Accepted Answer

A) True 
 B)False

Question 2

The accounting (for a bakery)entry to record the transfer of rolls from the mixing department to the baking department is:

Accepted Answer

A) True 
 B)False

Question 3

What is meant by the term "prime cost pool"?

Accepted Answer

A prime cost is a direct cost.In most pr

Question 4

When there are multiple support departments within an organization,it is common to use journal entries to transfer-in costs from one department to another.What are some of the points to remember about these costs?

Accepted Answer

1.Be sure to include transferred-in cost

Question 5

Use the information below to answer the following question(s).
Reynolds Dock Company manufactures boat docks on an assembly line.Its standard costing system utilizes 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 October 2016 are:
  
-Which of the following journal entries properly records the assignment of conversion costs to work-in-process inventory,and the conversion-cost variances of the Assembly Department assuming that conversion costs are 20% higher than expected?

Accepted Answer

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

Question 6

Production costs are divided into three classifications: administrative costs,direct materials,and conversion costs in process costing.

Accepted Answer

A) True 
 B)False

Question 7

In the weighted-average method,costs of units completed and transferred out,and in ending work-in-process,are calculated using average total costs obtained after merging costs of beginning work-in-process and costs added in the current period.

Accepted Answer

A) True 
 B)False

Question 8

Universal Industries operates a division in Brazil,a country with very high inflation rates.Traditionally,the company has used the same costing techniques in all countries so as to facilitate reporting to corporate headquarters.However,the financial accounting reports from Brazil never seem to match the actual unit results of the division.Management has studied the problem and it appears that beginning inventories may be the cause of the unmatched information.The reason is that the inventories have a different financial base because of the severe inflation.
Required:How can process costing assist in addressing the problem facing Universal Industries?

Accepted Answer

Probably the best way to address the pro

Question 9

Lexington Company produces baseball bats and cricket paddles.It has two departments that process all products.During July,the beginning work in process in the cutting department was half completed as to conversion,and complete as to direct materials.The beginning inventory included $40,000 for materials and $60,000 for conversion costs.Ending work-in-process inventory in the cutting department was 40% complete.Direct materials are added at the beginning of the process.
Beginning work in process in the finishing department was 80% complete as to conversion.Direct materials for finishing the units are added near the end of the process.Beginning inventories included $24,000 for transferred-in costs and $28,000 for conversion costs.Ending inventory was 30% complete.Additional information about the two departments follows:
   
Required:
Prepare a production cost worksheet,using FIFO for the finishing department.

Accepted Answer

Production Cost Work

Question 10

Use the information below to answer the following question(s).
Father Time Clock Shop manufactures clocks on an automated assembly line.It utilizes two cost categories: direct materials and conversion costs.Each product must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of production,while conversion costs are allocated evenly throughout production,and the company uses weighted-average costing.
Data for the Assembly Department are:
  
-What is the total amount debited to the work-in-process account during the month of June at Father Time Clock Shop?

Accepted Answer

A) $450,000 
B) $2,000,000 
C) $2,270,000 
D) $2,450,000 
E) $3,250,000 
A) $450,000 
B) $2,000,000 
C) $2,270,000 
D) $2,450,000 
E) $3,250,000

Question 11

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:
  
-How many units must be accounted for during the period,assuming a FIFO cost flow assumption?

Accepted Answer

A) 450,000 units 
B) 400,000 units 
C) 359,000 units 
D) 300,000 units 
E) 275,000 units 
A) 450,000 units 
B) 400,000 units 
C) 359,000 units 
D) 300,000 units 
E) 275,000 units

Question 12

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 13

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.
-How many cushions were started during May at Carnival Furniture?

Accepted Answer

A) 60,000 cushions 
B) 120,000 cushions 
C) 140,000 cushions 
D) 180,000 cushions 
E) 223,000 cushions 
A) 60,000 cushions 
B) 120,000 cushions 
C) 140,000 cushions 
D) 180,000 cushions 
E) 223,000 cushions

Question 14

Costing systems that are used for costing like or similar units of products in mass production are called

Accepted Answer

A) inventory-costing systems. 
B) job-costing systems. 
C) process-costing systems. 
D) weighted-average costing systems. 
E) bulk costing systems. 
A) inventory-costing systems. 
B) job-costing systems. 
C) process-costing systems. 
D) weighted-average costing systems. 
E) bulk costing systems.

Question 15

Use the information below to answer the following question(s).
Canadian Oil Company manufactures cooking oils.All direct materials are added at the beginning of the production process.The company currently uses the FIFO method.Data for the month of July is listed below.
  
-What is the amount of goods transferred-out during the month assuming no labour or conversion costs?

Accepted Answer

A) $398,950 
B) $383,400 
C) $378,000 
D) $357,000 
E) $391,000 
A) $398,950 
B) $383,400 
C) $378,000 
D) $357,000 
E) $391,000

Question 16

Excalibur Ltd.began operations on October 1 of the current year.Its production requires that direct materials are added at the beginning of the process and conversion costs are incurred uniformly.Direct materials costs for October were $380,000 and conversion costs were $1,750,000.There were 80,000 units started during the month.The ending inventory was 25,000 units which were 60% complete.The cost per equivalent unit for conversion was

Accepted Answer

A) $25.00. 
B) $21.88. 
C) $70.00. 
D) $116.67. 
E) $16.67. 
A) $25.00. 
B) $21.88. 
C) $70.00. 
D) $116.67. 
E) $16.67.

Question 17

Standard costing is not possible in a firm that uses process costing.

Accepted Answer

A) True 
 B)False

Question 18

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

Production Cost Work

Question 19

Unit costs do not fluctuate between periods.

Accepted Answer

A) True 
 B)False

Question 20

Use the information below to answer the following question(s).
Father Time Clock Shop manufactures clocks on an automated assembly line.It utilizes two cost categories: direct materials and conversion costs.Each product must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of production,while conversion costs are allocated evenly throughout production,and the company uses weighted-average costing.
Data for the Assembly Department are:
  
-What amount of conversion costs are assigned to ending work-in-process for June at Father Time Clock Shop?

Accepted Answer

A) $160,986.38 
B) $137,993.63 
C) $141,111.00 
D) $188,148.00 
E) $111,110.63 
A) $160,986.38 
B) $137,993.63 
C) $141,111.00 
D) $188,148.00 
E) $111,110.63

Activity-based costing has more applicability in a process-costing system than in a job-costing environment.

The accounting (for a bakery)entry to record the transfer of rolls from the mixing department to the baking department is:

What is meant by the term "prime cost pool"?

When there are multiple support departments within an organization,it is common to use journal entries to transfer-in costs from one department to another.What are some of the points to remember about these costs?

Production costs are divided into three classifications: administrative costs,direct materials,and conversion costs in process costing.

In the weighted-average method,costs of units completed and transferred out,and in ending work-in-process,are calculated using average total costs obtained after merging costs of beginning work-in-process and costs added in the current period.

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

Costing systems that are used for costing like or similar units of products in mass production are called

Standard costing is not possible in a firm that uses process costing.

Unit costs do not fluctuate between periods.

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

Activity-based costing has more applicability in a process-costing system than in a job-costing environment.

The accounting (for a bakery)entry to record the transfer of rolls from the mixing department to the baking department is:

What is meant by the term "prime cost pool"?

When there are multiple support departments within an organization,it is common to use journal entries to transfer-in costs from one department to another.What are some of the points to remember about these costs?

Production costs are divided into three classifications: administrative costs,direct materials,and conversion costs in process costing.

In the weighted-average method,costs of units completed and transferred out,and in ending work-in-process,are calculated using average total costs obtained after merging costs of beginning work-in-process and costs added in the current period.

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

Costing systems that are used for costing like or similar units of products in mass production are called

Standard costing is not possible in a firm that uses process costing.

Unit costs do not fluctuate between periods.

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