Exam 20: Process Costing

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

The combined production costs from all departments for completed products are transferred to the Cost of Goods Sold account immediately after the completion of all production processes.

Under the first-in,first-out (FIFO)method,the current period equivalent units of production for transferred in units in beginning inventory are zero because ________.

When indirect materials are issued to production,the Raw Materials Inventory account is credited.

The Work-in-Process Inventory account of a department is credited when overallocation of manufacturing overhead occurs in that department.

During August,the Filtering Department of Union Square,Inc.had a beginning Work-in-Process Inventory balance of 150 units with costs of $55,000.During the month,it started and completed 280 units.It had 30 units in the ending Work-in-Process Inventory.What is the number of equivalent units of production for transferred in units in the Filtering Department in August under the first-in,first-out (FIFO)method?

In most organizations,managers are often rewarded based on how well they meet the budget.

Companies that manufacture identical items through a series of uniform production steps use ________ to determine cost per unit sold.

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

A production cost report provides inventory and cost of goods sold data that are needed for the balance sheet.

During the month,New Products Manufacturing incurred $47,000 in direct labor costs in Department 1,$24,000 direct labor costs in Department 2,and $3,500 of indirect labor costs.The summary journal entry to record these transactions includes a ________.

Effects Manufacturing produces a pesticide chemical 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,30,000 gallons were transferred in from the Mixing Department,and 30,000 gallons were completed and transferred out.At the end of the month,4,000 gallons of partially processed product remained in the Refining Department.See additional details below. Refining Department,ending balance at January 31 What was the total number of equivalent units of production for conversion costs for the month of January for the Refining Department?

When indirect materials are issued to production,the Manufacturing Overhead account is credited.

The weighted-average method determines the cost of equivalent units of production by accounting for beginning inventory costs separately from current period costs.

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

The Raw Materials Inventory account is debited when direct materials are issued for production.

If 30,000 units are 60% complete with respect to direct materials,then the equivalent units of production for direct materials are ________.

Why are extra journal entries required in a process costing system?

Under a process costing system,direct labor costs are assigned to the Work-in-Process Inventory account of the department for which they are incurred.

Under process costing,direct materials and direct labor are assigned to Work-in-Process Inventory for each process that uses them.