Question 1

Debiting Work in Process in Department Two and crediting Work in Process in Department One represents costs transferred from Department Two to Department One.

Accepted Answer

A) True 
 B)False

Question 2

Process costing system-journal entries
Milton Manufacturing uses a process costing system.Products are processed successively by Department X and Department Y and are then transferred to the finished goods warehouse.Shown below is cost information for Department Y during the month of May:   The cost of work in process in Department Y at May 31 has been determined to be $113,500.
In the space provided,prepare a general journal entry to summarize for the month of May each of the following categories of transactions (you may omit explanations):
(a.)The transfer of production from Department X to Department Y.
(b.)The recording of manufacturing costs incurred in Department Y during May.(Use a single journal entry.)
(c.)The transfer of completed units from Department Y to the finished goods warehouse.

Accepted Answer

The answer of Process costing system-journal entries
Milton Manufacturing uses a...

Question 3

In a production cost report,the units in beginning Work in Process are always expressed as equivalent units.

Accepted Answer

A) True 
 B)False

Question 4

Job order and process costing systems
There are two distinct types of cost accounting systems: job order costing systems and process costing systems.How does management decide whether to use a job order costing system or a process costing system in any given manufacturing situation? Explain briefly.

Accepted Answer

Whether a manufacturing company should u

Question 5

The cost transferred to Cost of Goods Sold is equal to the total manufacturing costs incurred for the units sold.

Accepted Answer

A) True 
 B)False

Question 6

United Construction Company,which manufactures residential buildings,would most likely use a process costing system.

Accepted Answer

A) True 
 B)False

Question 7

In either a job order or a process costing system,credits to the Materials Inventory account represent:

Accepted Answer

A) The cost of materials purchased during the period. 
B) The cost of materials relating to finished goods. 
C) The cost of unused materials returned to the inventory. 
D) The cost of materials placed into production. 
A) The cost of materials purchased during the period. 
B) The cost of materials relating to finished goods. 
C) The cost of unused materials returned to the inventory. 
D) The cost of materials placed into production.

Question 8

As costs flow from one production department to the next in a process costing system,one Work in Process Inventory account shows all the changes to the units in production.

Accepted Answer

A) True 
 B)False

Question 9

A process costing system is suitable for a company with a large volume of standard products produced on a relatively continuous basis,for example,golf balls or petroleum.

Accepted Answer

A) True 
 B)False

Question 10

Equivalent units of production significantly differ from units completed and transferred during the period only when no significant differences exist between beginning and ending work in process.

Accepted Answer

A) True 
 B)False

Question 11

Process costing system-journal entries
Joyce Industries uses a process costing system.All of the company's manufacturing activities take place in a single processing department.There was no beginning inventory in May.During the month,$60,000 of materials were added and $40,000 of labor and $75,000 of overhead costs were charged to work in process.The entire work in process inventory of 20,000 units was completed and transferred to finished goods.Of these 20,000 units,15,000 were sold on account at $14 per unit.
In the space provided,prepare a general journal entry to summarize each of the following categories of transactions for the month of May (you may omit explanations):
(a.)The recording of manufacturing costs applied to production (use a single journal entry).
(b.)The transfer of completed units from work in process to the finished goods warehouse.
(c.)The sale of 15,000 units manufactured during the month and the related cost of goods sold.

Accepted Answer

The answer of Process costing system-journal entries
Joyce Industries uses a...

Question 12

To identify the cause of a change in a product total unit cost,management may:

Accepted Answer

A) Compute per unit product cost in total. 
B) Compute per unit total cost. 
C) Compute per unit product cost for each individual production department. 
D) Compare prior period to current period per unit product cost in total. 
A) Compute per unit product cost in total. 
B) Compute per unit total cost. 
C) Compute per unit product cost for each individual production department. 
D) Compare prior period to current period per unit product cost in total.

Question 13

In a production cost report,the units transferred out

Accepted Answer

A) True 
 B)False

Question 14

Equivalent units
What is meant by the term equivalent units? How is this concept used in computing average unit costs?

Accepted Answer

An equivalent nit is a measure of the to

Question 15

Jiffy Company has 3,000 units that are 70% complete.Jiffy's "equivalent units" are 3,000 completed units.

Accepted Answer

A) True 
 B)False

Question 16

Process costing would be suitable for:

Accepted Answer

A) Automobile repair. 
B) Production of television sets. 
C) Boat building. 
D) Kitchen remodeling. 
A) Automobile repair. 
B) Production of television sets. 
C) Boat building. 
D) Kitchen remodeling.

Question 17

During the month of August,$582,000 of costs were transferred from the Mixing Department to the Baking Department.The journal entry to summarize the transfer of these costs includes:

Accepted Answer

A) A debit to the Mixing department for $582,000. 
B) A debit to the Baking department for $582,000. 
C) A credit to the Baking department for $582,000. 
D) A debit to Finished Goods Inventory. 
A) A debit to the Mixing department for $582,000. 
B) A debit to the Baking department for $582,000. 
C) A credit to the Baking department for $582,000. 
D) A debit to Finished Goods Inventory.

Question 18

The number of equivalent units of production:

Accepted Answer

A) Is equal to the number of units completed by a department. 
B) May not be greater than the number of units completed by a department. 
C) Is used to complete the overhead application rate. 
D) May be less than,equal to,or greater than the number of physical units completed during the period. 
A) Is equal to the number of units completed by a department. 
B) May not be greater than the number of units completed by a department. 
C) Is used to complete the overhead application rate. 
D) May be less than,equal to,or greater than the number of physical units completed during the period.

Question 19

In most process costing systems,per-unit costs are determined by:

Accepted Answer

A) Dividing the number of units completed during the period by the total manufacturing costs incurred during the period. 
B) Dividing the total manufacturing costs incurred during the period by the number of units worked on during the period. 
C) Dividing the total manufacturing costs incurred during the period by the equivalent number of units completed during the period. 
D) Unit costs cannot be determined in a process costing system. 
A) Dividing the number of units completed during the period by the total manufacturing costs incurred during the period. 
B) Dividing the total manufacturing costs incurred during the period by the number of units worked on during the period. 
C) Dividing the total manufacturing costs incurred during the period by the equivalent number of units completed during the period. 
D) Unit costs cannot be determined in a process costing system.

Question 20

Completing 3,000 units which were each 75% complete at the beginning of the period represents 2,250 equivalent units of work during the current period.
If at the beginning of the period 3,000 units were 75% completed,then to complete these units during the current period,the equivalent units = 3,000 × (100% - 75%)= 750 equivalent units.

Accepted Answer

A) True 
 B)False

Exam 18: Process Costing

Debiting Work in Process in Department Two and crediting Work in Process in Department One represents costs transferred from Department Two to Department One.

In a production cost report,the units in beginning Work in Process are always expressed as equivalent units.

The cost transferred to Cost of Goods Sold is equal to the total manufacturing costs incurred for the units sold.

United Construction Company,which manufactures residential buildings,would most likely use a process costing system.

In either a job order or a process costing system,credits to the Materials Inventory account represent:

As costs flow from one production department to the next in a process costing system,one Work in Process Inventory account shows all the changes to the units in production.

A process costing system is suitable for a company with a large volume of standard products produced on a relatively continuous basis,for example,golf balls or petroleum.

Equivalent units of production significantly differ from units completed and transferred during the period only when no significant differences exist between beginning and ending work in process.

To identify the cause of a change in a product total unit cost,management may:

In a production cost report,the units transferred out

Equivalent units What is meant by the term equivalent units? How is this concept used in computing average unit costs?

Jiffy Company has 3,000 units that are 70% complete.Jiffy's "equivalent units" are 3,000 completed units.

Process costing would be suitable for:

During the month of August,$582,000 of costs were transferred from the Mixing Department to the Baking Department.The journal entry to summarize the transfer of these costs includes:

The number of equivalent units of production:

In most process costing systems,per-unit costs are determined by:

Accounting: Information for Decision Making

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The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

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Financial Statement Analysis

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Costing and the Value Chain

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