Question 1

Perez Manufacturing purchased raw materials worth $8000 on account.The journal entry to record the purchase of raw materials on account is ________.Process costing is used.

Accepted Answer

A)  debit Cash, $8000; credit Raw Materials Inventory, $8000 
B)  debit Accounts Payable, $8000; credit Raw Materials Inventory, $8000 
C)  debit Raw Materials Inventory, $8000; credit Accounts Payable, $8000 
D)  debit Raw Materials Inventory, $8000; credit Cash, $8000 
A)  debit Cash, $8000; credit Raw Materials Inventory, $8000 
B)  debit Accounts Payable, $8000; credit Raw Materials Inventory, $8000 
C)  debit Raw Materials Inventory, $8000; credit Accounts Payable, $8000 
D)  debit Raw Materials Inventory, $8000; credit Cash, $8000

Question 2

Under process costing,the total production costs incurred in each process must be split between the units that have been completed in that process and transferred to the next process and the ________.

Accepted Answer

A)  Finished Goods Inventory if it is the first process 
B)  units not completed and remaining in Work-in-Process Inventory for that department 
C)  Cost of Goods Sold when the units are sold 
D)  Work-in-Process Inventory of the previous department when there are no sales 
A)  Finished Goods Inventory if it is the first process 
B)  units not completed and remaining in Work-in-Process Inventory for that department 
C)  Cost of Goods Sold when the units are sold 
D)  Work-in-Process Inventory of the previous department when there are no sales

Question 3

Thomas Manufacturing produces a chemical pesticide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the Refining Department had 2000 gallons of partially processed product in production.During January,36,000 gallons were transferred in from the Mixing Department,and 31,000 gallons were completed and transferred out.At the end of the month,there were 7000 gallons of partially processed product remaining in the Refining Department.See additional details below. Refining Department,beginning balance at January 1
$$\begin{array} { l l } 
\text { Quantity: } & 2000 \text { units (partially processed) } \
\text { Cost: } & \$ 15,600 \text { of costs transfered in } \
& \$ 1600 \text { of materials cost } \
& \
&& \$ 4500 \text { of conversicon cost } \
&& \$ 21,70 0 \text { total account balance }
\end{array}$$ Costs added during January
$\begin{array}{ll}
\text { Cost of units transferred in } & \$ 222,400 \
\text { Direct materials cost } & \$ 46,000 \
\text { Conversion cost } & \$ 93,750
\end{array}$
 Refining Department,ending balance at January 31
Quantity: $ \quad 7000 $ units (partially processed)
Percent complete for materials cost: $ \quad 85 \% $
Percent complete for conversion cost: $ \quad 70 \% $
 What was the cost per equivalent unit with respect to direct materials costs for the Refining Department in the month of January? Use the weighted-average method.(Round your calculations to the nearest cent.)

Accepted Answer

A)  $1.29 
B)  $2.74 
C)  $1.25 
D)  $6.80 
A)  $1.29 
B)  $2.74 
C)  $1.25 
D)  $6.80

Question 4

In a process costing system ________.

Accepted Answer

A)  separate work-in-process inventory accounts are maintained for each process or department 
B)  work-in-process inventory employs one general ledger account with a subsidiary ledger 
C)  a job cost record is maintained for each job 
D)  costs are transferred when jobs are complete 
A)  separate work-in-process inventory accounts are maintained for each process or department 
B)  work-in-process inventory employs one general ledger account with a subsidiary ledger 
C)  a job cost record is maintained for each job 
D)  costs are transferred when jobs are complete

Question 5

List five ways in which managers use a production cost report to make decisions for their companies.

Accepted Answer

1.Controlling costs
2.Evaluati

Question 6

A production cost report helps managers identify the costs that can be reduced in the production process.

Accepted Answer

A) True 
 B)False

Question 7

For each of the following statements,indicate whether the statement applies to Job Order Costing Systems (JO)or Process Costing Systems (PC).
 $$\begin{array} { | l | l | } 
\hline& \text { JO or PC } \
\hline \begin{array} { l } 
\text { The company manufactures homogeneous products through a } \
\text { series of uniform steps or processes. }
\end{array} \
\hline \text { Cost transfers are made when each job is completed. } & \
\hline \begin{array} { l } 
\text { There are separate Work-in-Process Inventory accounts for each } \
\text { department. }
\end{array} & \
\hline \text { A job sheet is prepared for each job. } & \
\hline \text { Cost transfers are made at the end of the accounting period. } & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | } 
\hline {

Question 8

A textile manufacturing company is most likely to use job order costing to arrive at the cost per yard of textile manufactured and sold to customers.

Accepted Answer

A) True 
 B)False

Question 9

Under process costing,the ________ account is credited to adjust for overallocated overhead costs.The perpetual inventory system is used.

Accepted Answer

A)  Cost of Goods Sold 
B)  Sales Revenue 
C)  Manufacturing Overhead 
D)  Finished Goods Inventory 
A)  Cost of Goods Sold 
B)  Sales Revenue 
C)  Manufacturing Overhead 
D)  Finished Goods Inventory

Question 10

Under a process costing system,costs of completed products are transferred to the Finished Goods Inventory at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 11

The Refining Department of Crystal Cane Sugar,Inc.had 56,000 tons of sugar to account for in December.Of the 56,000 tons,40,000 tons were completed and transferred to the Boiling Department,and the remaining 16,000 tons were 60% complete.The materials required for production are added at the beginning of the process.Conversion costs are added equally throughout the refining process.The weighted-average method is used.Calculate the total equivalent units of production for conversion costs.

Accepted Answer

A)  9600 units 
B)  40,000 units 
C)  49,600 units 
D)  56,000 units 
A)  9600 units 
B)  40,000 units 
C)  49,600 units 
D)  56,000 units

Question 12

The Refining Department of SweetBeet,Inc.had 79,000 tons of sugar to account for in July.Of the 79,000 tons,49,000 tons were completed and transferred to the Boiling Department,and the remaining 30,000 tons were 50% complete.The materials required for production are added at the beginning of the process.Conversion costs are added evenly throughout the refining process.The weighted-average method is used.Calculate the total equivalent units of production for direct materials.

Accepted Answer

A)  64,000 units 
B)  49,000 units 
C)  15,000 units 
D)  79,000 units 
A)  64,000 units 
B)  49,000 units 
C)  15,000 units 
D)  79,000 units

Question 13

The cost per equivalent unit for transferred in units is calculated by dividing total transferred in costs by the equivalent units of production for transferred in units.

Accepted Answer

A) True 
 B)False

Question 14

A production cost report aids in preparing an income statement by providing data for ________.

Accepted Answer

A)  period costs incurred during the period 
B)  various inventory accounts 
C)  cost of goods sold during the period 
D)  revenues generated during the period 
A)  period costs incurred during the period 
B)  various inventory accounts 
C)  cost of goods sold during the period 
D)  revenues generated during the period

Question 15

Nelson Manufacturing has two processing departments,Department I and Department II.The raw materials processed at Department I are sent to Department II for further processing.During June,direct materials worth $40,000 purchased on account were assigned to Department I.The journal entry to record direct materials used in production is ________.

Accepted Answer

A)  debit Work-in-Process Inventory-Department I, $40,000; credit Raw Materials Inventory, $40,000 
B)  debit Raw Materials Inventory, $40,000; credit Work-in-Process Inventory-Department I, $40,000 
C)  debit Work-in-Process Inventory-Department I, $40,000; credit Accounts Payable, $40,000 
D)  debit Accounts Payable, $40,000; credit Work-in-Process Inventory-Department I, $40,000 
A)  debit Work-in-Process Inventory-Department I, $40,000; credit Raw Materials Inventory, $40,000 
B)  debit Raw Materials Inventory, $40,000; credit Work-in-Process Inventory-Department I, $40,000 
C)  debit Work-in-Process Inventory-Department I, $40,000; credit Accounts Payable, $40,000 
D)  debit Accounts Payable, $40,000; credit Work-in-Process Inventory-Department I, $40,000

Question 16

A predetermined overhead allocation rate is used to allocate direct materials costs to various processes or departments.Process costing is used.

Accepted Answer

A) True 
 B)False

Question 17

Sigua Sugar,Inc.in Florida has six processing departments for refining sugar-Affination,Carbonation,Decolorization,Boiling,Recovery,and Packaging.Conversion costs are added evenly throughout each process.Data from the month of August for the Decolorization Department are as follows: $$\begin{array} { | l | r | } 
\hline & \text { Metric Tons } \
\hline \text { Beginning Work-in-Process Inventory } & 0 \
\hline \text { Transferred in production } & 12,200 \
\hline \text { Completed and transferred out to Boiling in } & \
\text { August } & 7200 \
\hline \text { Ending Work-in-Process Inventory } & \underline { 5000 } \
\hline
\end{array}$$ $$\begin{array} { | l | r | } 
\hline & { \text { Costs } } \
\hline \text { Beginning Work-in-Process Inventory } & \$ 0 \
\hline \text { Costs added during August } & \
\hline \text { Direct materials } & 2,100,000 \
\hline \text { Direct labor } & 1,030,000 \
\hline \text { Manufacturing overhead } & \underline { 600,000 } \
\hline \text { Total costs added during August } & \$ 3,730,000 \
\hline
\end{array}$$ The ending Work-in-Process Inventory is 100% and 70% complete with respect to direct materials and conversion costs,respectively.Compute the equivalent units of production (EUP)for direct materials and for conversion costs for the month of August.The weighted-average method is used.

Accepted Answer

A)  10,700 EUP for direct materials and 3500 EUP for conversion costs 
B)  12,200 EUP for direct materials and 10,700 EUP for conversion costs 
C)  3500 EUP for direct materials and 10,700 EUP for conversion costs 
D)  12,200 EUP for direct materials and 3500 EUP for conversion costs 
A)  10,700 EUP for direct materials and 3500 EUP for conversion costs 
B)  12,200 EUP for direct materials and 10,700 EUP for conversion costs 
C)  3500 EUP for direct materials and 10,700 EUP for conversion costs 
D)  12,200 EUP for direct materials and 3500 EUP for conversion costs

Question 18

The production cost reports show the calculations for the physical flows and the ________ flows of the products.

Accepted Answer

A)  cash 
B)  price 
C)  cost 
D)  supply 
A)  cash 
B)  price 
C)  cost 
D)  supply

Question 19

The Assembly Department of Protocol,Inc.,manufacturer of computers,incurred $280,000 in direct material costs and $70,000 in conversion costs.The equivalent units of production for direct materials and conversion costs are 1000 and 900,respectively.The weighted-average method is used.The cost per equivalent unit of production for direct materials is ________.(Round your answer to the nearest cent.)

Accepted Answer

A)  $77.78 
B)  $70.00 
C)  $311.11 
D)  $280.00 
A)  $77.78 
B)  $70.00 
C)  $311.11 
D)  $280.00

Question 20

Duran Manufacturing uses a process costing system and manufactures its product in three departments.Which of the following is NOT a way in which Duran can use the cost per unit of each process?

Accepted Answer

A)  Duran can look for ways to cut the costs when actual process costs are more than planned process costs. 
B)  Duran needs to set the selling price to cover the costs of making the product and provide a profit. 
C)  Duran can only use the cost per unit of each process if all units are fully completed at the end of the accounting period. 
D)  Duran needs to know the ending balances in the following accounts: Work-In-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold. 
A)  Duran can look for ways to cut the costs when actual process costs are more than planned process costs. 
B)  Duran needs to set the selling price to cover the costs of making the product and provide a profit. 
C)  Duran can only use the cost per unit of each process if all units are fully completed at the end of the accounting period. 
D)  Duran needs to know the ending balances in the following accounts: Work-In-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.

Perez Manufacturing purchased raw materials worth $8000 on account.The journal entry to record the purchase of raw materials on account is ________.Process costing is used.

Under process costing,the total production costs incurred in each process must be split between the units that have been completed in that process and transferred to the next process and the ________.

In a process costing system ________.

List five ways in which managers use a production cost report to make decisions for their companies.

A production cost report helps managers identify the costs that can be reduced in the production process.

A textile manufacturing company is most likely to use job order costing to arrive at the cost per yard of textile manufactured and sold to customers.

Under process costing,the ________ account is credited to adjust for overallocated overhead costs.The perpetual inventory system is used.

Under a process costing system,costs of completed products are transferred to the Finished Goods Inventory at the end of the accounting period.

The cost per equivalent unit for transferred in units is calculated by dividing total transferred in costs by the equivalent units of production for transferred in units.

A production cost report aids in preparing an income statement by providing data for ________.

A predetermined overhead allocation rate is used to allocate direct materials costs to various processes or departments.Process costing is used.

The production cost reports show the calculations for the physical flows and the ________ flows of the products.

Duran Manufacturing uses a process costing system and manufactures its product in three departments.Which of the following is NOT a way in which Duran can use the cost per unit of each process?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 20: Process Costing

Perez Manufacturing purchased raw materials worth $8000 on account.The journal entry to record the purchase of raw materials on account is ________.Process costing is used.

Under process costing,the total production costs incurred in each process must be split between the units that have been completed in that process and transferred to the next process and the ________.

In a process costing system ________.

List five ways in which managers use a production cost report to make decisions for their companies.

A production cost report helps managers identify the costs that can be reduced in the production process.

A textile manufacturing company is most likely to use job order costing to arrive at the cost per yard of textile manufactured and sold to customers.

Under process costing,the ________ account is credited to adjust for overallocated overhead costs.The perpetual inventory system is used.

Under a process costing system,costs of completed products are transferred to the Finished Goods Inventory at the end of the accounting period.

The cost per equivalent unit for transferred in units is calculated by dividing total transferred in costs by the equivalent units of production for transferred in units.

A production cost report aids in preparing an income statement by providing data for ________.

A predetermined overhead allocation rate is used to allocate direct materials costs to various processes or departments.Process costing is used.

The production cost reports show the calculations for the physical flows and the ________ flows of the products.

Duran Manufacturing uses a process costing system and manufactures its product in three departments.Which of the following is NOT a way in which Duran can use the cost per unit of each process?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters