Question 1

The costs that were incurred in a previous process and brought into a later process as part of the product's cost are called ________ costs.

Accepted Answer

A) transferred in 
B) transferred out 
C) accounted for 
D) to account for 
A) transferred in 
B) transferred out 
C) accounted for 
D) to account for

Question 2

Nevada 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 $50,000 purchased on account were assigned to Department I.The journal entry to record the issue of direct materials to production is ________.

Accepted Answer

A) debit Work-in-Process Inventory-Department I,$50,000;credit Raw Materials Inventory,$50,000 
B) debit Raw Materials Inventory,$50,000;credit Work-in-Process Inventory-Department I,$50,000 
C) debit Work-in-Process Inventory-Department I,$50,000;credit Accounts Payable,$50,000 
D) debit Accounts Payable,$50,000;credit Work-in-Process Inventory-Department I,$50,000 
A) debit Work-in-Process Inventory-Department I,$50,000;credit Raw Materials Inventory,$50,000 
B) debit Raw Materials Inventory,$50,000;credit Work-in-Process Inventory-Department I,$50,000 
C) debit Work-in-Process Inventory-Department I,$50,000;credit Accounts Payable,$50,000 
D) debit Accounts Payable,$50,000;credit Work-in-Process Inventory-Department I,$50,000

Question 3

A process is one of a series of steps in manufacturing production,usually associated with making large quantities of similar items.

Accepted Answer

A) True 
 B)False

Question 4

The production cost report for Department 1 shows that $160,000 was assigned to the 31,000 units transferred to Department 2.This transfer cost assigned to units transferred to Department 2 is recorded with a debit to Work-in-Process-Department 2.

Accepted Answer

A) True 
 B)False

Question 5

Ten Hills Manufacturing has two processing departments,Department I and Department II.During the year,direct materials were assigned to the two production departments: $280,000 to Department I and $300,000 to Department II.During the period,$8,000 of indirect materials were used in production.Provide the journal entry to record this transaction.

Accepted Answer

The answer of Ten Hills Manufacturing has two processing departments,Department...

Question 6

Production cost reports prepared using the first-in,first-out (FIFO)method assume that the first units started in the production process are the first units completed and transferred out.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is used to calculate the number of units accounted for under first-in,first-out (FIFO)method of inventory valuation of process costing?

Accepted Answer

A) Accounted for = Beginning balance + Started and completed + In process 
B) Accounted for = Beginning balance + Started and completed 
C) Accounted for = Beginning balance + In process 
D) Accounted for = Beginning balance + Amount transferred in 
A) Accounted for = Beginning balance + Started and completed + In process 
B) Accounted for = Beginning balance + Started and completed 
C) Accounted for = Beginning balance + In process 
D) Accounted for = Beginning balance + Amount transferred in

Question 8

When raw materials are purchased on account,the Accounts Payable account is credited.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The cost of units sold is recorded by debiting Cost of Goods Sold and crediting ________.

Accepted Answer

A) Finished Goods Inventory 
B) Sales Revenue 
C) Work-in-Process Inventory 
D) Wages Payable 
A) Finished Goods Inventory 
B) Sales Revenue 
C) Work-in-Process Inventory 
D) Wages Payable

Question 11

Muses Manufacturing produces plastic toys and uses process costing.There are three processing departments-Assembling,Finishing,and Packaging.On January 1,the Finishing Department had 2,000 units of partially processed product in production.During January,31,000 units were transferred in from the Assembling Department and 30,000 units were completed and transferred out.At the end of the month,3,000 units of partially processed products remained in the Finishing Department.See additional details below.
Finishing Department,ending balance at January 31
 
What was the number of equivalent units for the month of January,with respect to direct materials,for the Finishing Department?

Accepted Answer

A) 32,820 units 
B) 33,000 units 
C) 30,000 units 
D) 2,820 units 
A) 32,820 units 
B) 33,000 units 
C) 30,000 units 
D) 2,820 units

Question 12

A process costing system is generally used by companies that produce homogeneous products.

Accepted Answer

A) True 
 B)False

Question 13

The beginning inventory costs and the product costs of the current period are combined to determine the average cost of equivalent units of production under the ________.

Accepted Answer

A) equivalent units method 
B) conversion costs method 
C) first-in,first-out method 
D) weighted-average method 
A) equivalent units method 
B) conversion costs method 
C) first-in,first-out method 
D) weighted-average method

Question 14

Process costing is the most appropriate costing method for a restaurant serving specialty cuisine.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements correctly describes the term "conversion costs"?

Accepted Answer

A) the cost to convert finished goods to sales to customers 
B) the cost incurred for direct and indirect materials during production 
C) the cost of direct materials,direct labor,and manufacturing overhead costs incurred during production 
D) the cost of direct labor combined with manufacturing overhead 
A) the cost to convert finished goods to sales to customers 
B) the cost incurred for direct and indirect materials during production 
C) the cost of direct materials,direct labor,and manufacturing overhead costs incurred during production 
D) the cost of direct labor combined with manufacturing overhead

Question 16

The Assembling Department of Miller,Inc.had 10,000 units in process on December 1 and received 30,000 units from the Sewing Department.During the month,it completed 20,000 units and transferred them to the Packaging Department.Calculate the number of units accounted for by the Assembling Department for December.Prepare the production cost report for the Assembling Department for the whole units for the month of December.Use the FIFO method.

Accepted Answer

@#IMG-DLM& 
Units to account for: @#IMG-DLM& 
Units accounte

Question 17

Ellie's Candies,Inc.produces gummy bears.The company purchases raw materials,stores them in a warehouse,and then runs them through two processes: production and packaging.During September,the production process incurred the following costs in processing 20,000 gummy bears:
 
Use the FIFO method to compute the September conversion costs in the Production Department.

Accepted Answer

A) $60,500 
B) $460,500 
C) $52,500 
D) $8,000 
A) $60,500 
B) $460,500 
C) $52,500 
D) $8,000

Question 18

In a production cost report,the number of units to account for must always be greater than the number of units accounted for.

Accepted Answer

A) True 
 B)False

Question 19

Under process costing,the unit cost of the completed units is less than the unit cost of the incomplete units.

Accepted Answer

A) True 
 B)False

Question 20

In a process costing system,costs can be controlled with the aid of a production cost report.

Accepted Answer

A) True 
 B)False

Exam 20: Process Costing

The costs that were incurred in a previous process and brought into a later process as part of the product's cost are called ________ costs.

A process is one of a series of steps in manufacturing production,usually associated with making large quantities of similar items.

The production cost report for Department 1 shows that $160,000 was assigned to the 31,000 units transferred to Department 2.This transfer cost assigned to units transferred to Department 2 is recorded with a debit to Work-in-Process-Department 2.

Production cost reports prepared using the first-in,first-out (FIFO)method assume that the first units started in the production process are the first units completed and transferred out.

Which of the following is used to calculate the number of units accounted for under first-in,first-out (FIFO)method of inventory valuation of process costing?

When raw materials are purchased on account,the Accounts Payable account is credited.

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

The cost of units sold is recorded by debiting Cost of Goods Sold and crediting ________.

A process costing system is generally used by companies that produce homogeneous products.

The beginning inventory costs and the product costs of the current period are combined to determine the average cost of equivalent units of production under the ________.

Process costing is the most appropriate costing method for a restaurant serving specialty cuisine.

Which of the following statements correctly describes the term "conversion costs"?

In a production cost report,the number of units to account for must always be greater than the number of units accounted for.

Under process costing,the unit cost of the completed units is less than the unit cost of the incomplete units.

In a process costing system,costs can be controlled with the aid of a production cost report.

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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