Question 1

The ________ account is credited to adjust for underallocated overhead costs.

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 2

Costs assigned to goods sold are transferred to the Cost of Goods Sold account from the ________.

Accepted Answer

A) Finished Goods Inventory account 
B) Work-in-Process Inventory account 
C) Raw Materials Inventory account 
D) Sales Revenue account 
A) Finished Goods Inventory account 
B) Work-in-Process Inventory account 
C) Raw Materials Inventory account 
D) Sales Revenue account

Question 3

Iowa,Inc.purchased raw materials for $6,000 and $25,000 for cash and on account,respectively.Provide the journal entry to record the purchase of raw materials.

Accepted Answer

The answer of Iowa,Inc.purchased raw materials for $6,000 and $25,000...

Question 4

The direct labor costs and manufacturing overhead costs required to produce finished goods from raw materials are called ________.

Accepted Answer

A) transferred in costs 
B) cost of sales 
C) finished goods costs 
D) conversion costs 
A) transferred in costs 
B) cost of sales 
C) finished goods costs 
D) conversion costs

Question 5

The equivalent units of production for direct materials and conversion costs must be the same.

Accepted Answer

A) True 
 B)False

Question 6

The Assembly Department of Intuitive,Inc. ,manufacturer of computers,had 2,000 units of beginning inventory in September,and 8,000 units were transferred to it by the Production Department.The Assembly Department completed 4,000 units during the month and transferred them to the Packaging Department.Calculate the total number of units accounted for by the Assembly Department if it had 6,000 units in ending inventory.The weighted-average method is used.

Accepted Answer

A) 6,000 units 
B) 8,000 units 
C) 2,000 units 
D) 10,000 units 
A) 6,000 units 
B) 8,000 units 
C) 2,000 units 
D) 10,000 units

Question 7

What does the concept of equivalent units of production allow businesses to measure?

Accepted Answer

Equivalent units of production allows bu

Question 8

The adjusting entry for overallocated or underallocated manufacturing overhead is usually prepared at the beginning of the accounting period.

Accepted Answer

A) True 
 B)False

Question 9

Egerton,Inc.has two processes-Coloring Department and Mixing Department.Egerton sold 350 gallons on account at $110 per gallon.The total cost of processing was $385,000 for 5,500 gallons of paint.Throughout the year,the company used a predetermined overhead allocation rate to allocate $75,000 and $65,000 of indirect costs to the Coloring Department and Mixing Department,respectively.The actual overhead cost incurred amounted to $150,000 at the end of the year.Record the necessary journal entries for the sale of goods and for adjustment of over- or underallocated manufacturing overhead at the end of the year.

Accepted Answer

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Notes:Sales Revenue = $110 × 350

Question 10

Jetwell,Inc.incurred $2,000 for indirect labor in Department III.The journal entry to record indirect labor utilized is ________.

Accepted Answer

A) debit Manufacturing Overhead,$2,000;credit Accounts Payable,$2,000 
B) debit Accounts Payable,$2,000;credit Manufacturing Overhead,$2,000 
C) debit Manufacturing Overhead,$2,000;credit Wages Payable,$2,000 
D) debit Wages Payable,$2,000;credit Manufacturing Overhead,$2,000 
A) debit Manufacturing Overhead,$2,000;credit Accounts Payable,$2,000 
B) debit Accounts Payable,$2,000;credit Manufacturing Overhead,$2,000 
C) debit Manufacturing Overhead,$2,000;credit Wages Payable,$2,000 
D) debit Wages Payable,$2,000;credit Manufacturing Overhead,$2,000

Question 11

Which of the following is not a way in which managers use the production cost reports to make decisions for their companies?

Accepted Answer

A) evaluating performance 
B) identifying the most profitable products 
C) controlling period costs 
D) preparing the financial statements 
A) evaluating performance 
B) identifying the most profitable products 
C) controlling period costs 
D) preparing the financial statements

Question 12

Gizmo Manufacturer,a widgets manufacturing company,divides its production operations into three processes-Department 1,Department 2,and Department 3.The company uses a process costing system.Gizmo incurred the following costs during the year to produce 4,600 units:
 
If Gizmo could sell only 3,600 units in during the year,what will be the cost per unit of widget produced? (Round your answer to the nearest cent. )

Accepted Answer

A) $5.11 
B) $3.80 
C) $9.31 
D) $7.28 
A) $5.11 
B) $3.80 
C) $9.31 
D) $7.28

Question 13

Under process costing,the number of units to account for must always be ________ the number of units accounted for.

Accepted Answer

A) greater than 
B) lesser than 
C) equal to 
D) twice 
A) greater than 
B) lesser than 
C) equal to 
D) twice

Question 14

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 4,000 gallons of partially processed product in production.During January,34,000 gallons were transferred in from the Mixing Department,and 32,000 gallons were completed and transferred out.At the end of the month,there were 6,000 gallons of partially processed product remaining in the Refining Department.See additional details below.
Refining Department,beginning balance at January 1
 
Costs added during January
 
Refining Department,ending balance at January 31
 
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) $2.71 
C) $1.26 
D) $8.00 
A) $1.29 
B) $2.71 
C) $1.26 
D) $8.00

Question 15

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

Accepted Answer

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

Question 16

Tobin Sugar,Inc.has six processing departments for refining sugar-Affination,Carbonation,Decolorization,Boiling,Recovery,and Packaging.Conversion costs are added evenly throughout each process,and materials are added at the beginning of each process.Data from August for the Recovery Department are as follows:
   
In August,15,000 metric tons were completed and sent to the Packaging Department.The ending Work-in-Process Inventory was 50% complete with respect to conversion costs.Prepare a production cost report for the Recovery Department to show the equivalent units for direct materials and conversion costs.The weighted-average method is used.

Accepted Answer

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Units to accoun

Question 17

Conversion costs include ________.

Accepted Answer

A) direct labor and manufacturing overhead costs 
B) direct material and direct labor costs 
C) product and period costs 
D) direct material,direct labor,and manufacturing overhead costs 
A) direct labor and manufacturing overhead costs 
B) direct material and direct labor costs 
C) product and period costs 
D) direct material,direct labor,and manufacturing overhead costs

Question 18

The task of summarizing the flow of physical units is one of the four steps involved in the preparation of the production cost report.

Accepted Answer

A) True 
 B)False

Question 19

Morewell,Inc.used a predetermined overhead allocation rate to allocate $85,000 and $65,000 of indirect costs to Coloring Department and Mixing Department,respectively.The journal entry to record the allocation of overhead costs to the Coloring Department is ________.

Accepted Answer

A) debit Manufacturing Overhead,$85,000;credit Work-in-Process Inventory-Mixing,$85,000 
B) debit Work-in-Process Inventory-Coloring,$85,000;credit Manufacturing Overhead,$85,000 
C) debit Work-in-Process Inventory-Coloring,$65,000;credit Manufacturing Overhead,$65,000 
D) debit Manufacturing Overhead,$65,000;credit Work-in-Process Inventory-Mixing,$65,000 
A) debit Manufacturing Overhead,$85,000;credit Work-in-Process Inventory-Mixing,$85,000 
B) debit Work-in-Process Inventory-Coloring,$85,000;credit Manufacturing Overhead,$85,000 
C) debit Work-in-Process Inventory-Coloring,$65,000;credit Manufacturing Overhead,$65,000 
D) debit Manufacturing Overhead,$65,000;credit Work-in-Process Inventory-Mixing,$65,000

Question 20

Which of the following statements is true of process costing?

Accepted Answer

A) It uses one Work-in-Process Inventory account. 
B) It tracks and assigns both period costs and product costs to units produced. 
C) It accumulates product costs by production departments. 
D) It assigns manufacturing overhead costs to products only in the last production process. 
A) It uses one Work-in-Process Inventory account. 
B) It tracks and assigns both period costs and product costs to units produced. 
C) It accumulates product costs by production departments. 
D) It assigns manufacturing overhead costs to products only in the last production process.

Exam 20: Process Costing

The ________ account is credited to adjust for underallocated overhead costs.

Costs assigned to goods sold are transferred to the Cost of Goods Sold account from the ________.

Iowa,Inc.purchased raw materials for $6,000 and $25,000 for cash and on account,respectively.Provide the journal entry to record the purchase of raw materials.

The direct labor costs and manufacturing overhead costs required to produce finished goods from raw materials are called ________.

The equivalent units of production for direct materials and conversion costs must be the same.

What does the concept of equivalent units of production allow businesses to measure?

The adjusting entry for overallocated or underallocated manufacturing overhead is usually prepared at the beginning of the accounting period.

Jetwell,Inc.incurred $2,000 for indirect labor in Department III.The journal entry to record indirect labor utilized is ________.

Which of the following is not a way in which managers use the production cost reports to make decisions for their companies?

Under process costing,the number of units to account for must always be ________ the number of units accounted for.

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

Conversion costs include ________.

The task of summarizing the flow of physical units is one of the four steps involved in the preparation of the production cost report.

Morewell,Inc.used a predetermined overhead allocation rate to allocate $85,000 and $65,000 of indirect costs to Coloring Department and Mixing Department,respectively.The journal entry to record the allocation of overhead costs to the Coloring Department is ________.

Which of the following statements is true of process costing?

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

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