Exam 20: Process Cost Accounting

Embark produces mulch for landscaping use. The following information summarizes production operations for June. The journal entry to record June production activities for goods transfer from production to finished goods is:

A production department is an organizational unit that has the responsibility for at least partially processing a product.

Direct costs in process cost accounting include only those costs that can be readily identified with individual product units.

An organizational unit of a factory that has the responsibility for partially manufacturing or producing a product is called a:

Hou Company applies factory overhead to its production departments on the basis of 90% of direct labor costs. In the Assembly Department, Hou had $125,000 of direct labor cost, and in the Finishing Department, Hou had $35,000 of direct labor cost. The entry to apply overhead to these production departments is:

The third step in accounting for production activity in a period is to compute the ____________________.

When defining direct costs and indirect costs in process costing, it is the process that is the cost object.

A measure of the productivity of a process with respect to its use of direct materials, direct labor, or overhead, and an expression of the activity of a process as the number of units that would have been processed during a period if all effort had been applied to units that were started and finished during the period, is called:

If the factory labor cost for a month was $123,000 (paid in cash), the following journal entry would be recorded by the process cost accounting system:

A company uses a process cost accounting system. Its Sewing Department completed and transferred out 120,000 units during the current period. The ending inventory in the Sewing Department consists of 40,000 units (20% complete with respect to direct materials and 60% complete with respect to direct labor). Overhead is applied on the basis of direct labor. Determine the equivalent units of production for the Sewing Department for direct materials, direct labor and overhead assuming the weighted average method.

After posting all actual factory overhead and applying factory overhead to production departments in a process costing system,

Process manufacturing, also called process operations or process production, is the ___________ production of products in a _____________________ flow of steps.

The Packing Department transferred out completed units with a cost of $74,000. This transfer should be recorded with the following entry:

A company's beginning work in process inventory consisted of 20,000 units that were 1/5 complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were 1/3 complete at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

Refer to the following information about the Dipping Department of the Indiana Factory for the month of August. Indiana Factory uses the FIFO method of inventory costing. The cost per equivalent unit of materials is $10.00, and the cost per equivalent unit of labor and overhead is $22.00. Compute the cost that should be assigned to the units that were started and completed during August.

In a process costing system, factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

If the indirect materials cost for a reporting period was $37,500, the following journal entry would be recorded in the process cost accounting system:

In a process cost accounting system, the purchase of raw materials is credited to the Raw Materials Inventory.

During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor. Compute the number of equivalent units with respect to both materials and direct labor respectively for March using the weighted-average method.

The following data are available for a company's manufacturing activities: If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively using the FIFO method of process costing?