Exam 20: Process Cost Accounting

In a process costing accounting system, direct materials used are debited to the ______________________ account, and indirect materials used are debited to the ______________________ account.

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:

The FIFO method separates prior period costs from costs incurred during the current period.

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 company that applies process costing is most frequently characterized by:

In a process operation, the direct labor of a production department includes:

If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them.

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

Heesacker, Inc. uses a process cost accounting system. The following operating and cost data occurred during October: Materials are added at the beginning of the process. Direct labor and overhead are incurred evenly throughout the process. Prepare the October process cost summary assuming the weighted average method of inventory costing.

In some circumstances, a process cost accounting system can classify wages paid to maintenance workers as direct labor costs instead of factory overhead.

Process cost accounting systems consider direct costs to include those costs that can be readily identified with a particular process.

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:

Equivalent units of production are always the same as the total number of physical units finished during the period.

A company uses the weighted average method for inventory costing. During a period, a production department had 20,000 units in beginning goods in process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending goods in process inventory and are 75% complete. All of these are with respect to labor. The production department had labor costs in the beginning goods is process inventory of $99,000 and total labor costs added during the period are $726,825. Compute the equivalent cost per unit for labor.

Process costing is applied to operations with repetitive production and heterogeneous products.

The number of equivalent units of production assigned to ending goods in process inventory should be equal to or less than the number of physical units in ending goods in process inventory.

A ____________________ contains features of both process and job order operations.

In process cost accounting, the classification of materials as direct or indirect depends on whether they are clearly linked with a specific process.

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 all units that were completed and transferred during August.

On a process cost summary, the total costs to account for (the processing costs for the period plus the goods in process at the end of the period) should equal ___________________ (______________________ plus ___________________).