Exam 5: Process Costing and Operation Costing

In both job and process costing,the journal entry to record predetermined overhead is as follows.

Operation costing is appropriate for products with the following characteristics.i.Repetitive mass production Ii)Individual products Iii)Large batches with repetitive processes Iv)Some unique features,some common features

In both job and process costing,the journal entry to record completed goods is as follows.

Process costing systems are suitable for firms that produce: i.homogeneous products ii.heterogeneous products iii.individual products iv.repetitive products

Healthy Flavour is a food processing company that makes a product called Health Nut soup in two processes-blending and condensing.The output of the blending department is transferred to the condensing department.All materials are added at the beginning of the blending process,and conversion activity occurs uniformly throughout both processes.The following data pertain to the month of April in the blending department.Using the FIFO method of process costing,calculate the equivalent units of direct materials for the month of April.

Which of the following are components of conversion costs?

The establishment of predetermined conversion costs for operation costing requires which of the following.i.Budgeted level of the cost driver Ii)Budgeted direct labour costs Iii)Budgeted manufacturing overhead costs

South River Chemicals Pty Ltd manufactures a product called Zybek.Direct materials are added at the beginning of the process and conversion activity occurs uniformly throughout the process.The following selected data pertain to the month of May.What are the unit costs for the period (rounded to two decimal places)assuming weighted average costing?

A standard cost is a budgeted cost per unit.

Heara Ltd manufactures metal sheets,and uses the FIFO process costing.On 1 May the Rolling Department had 3000 units work in progress,which were 50 per cent completed as to conversion costs.During May 8000 units were completed and transferred out.The remaining work in progress on 30 May was 2000 units at 50 per cent complete in terms of conversion rate.What is the equivalent unit of conversion?

Where a process has two departments [A and B],the first new debit entry in the work in process inventory account for Department B in any period will be transferred-in costs.

Which of the following statements about operation costing is true? i.Conversion costs are accumulated by department ii.Direct material costs are accumulated by batch. iii.It is a hybrid product costing system.

Assume material is added at the beginning of a process,and the beginning WIP inventory is 30 per cent complete as to conversion costs.Using the weighted average method of costing,the total equivalent units for material for this process during this period is equal to:

Eldervale Winery produces premium wine in the Hunter Valley.Jasmine Droll,the vineyard manager who is responsible for overseeing the grape harvest,ignores company guidelines and decides to hire some inexperienced harvest workers.As a result a lot of good grapes are wasted.For the purpose of product costing,the losses associated with this grape wastage should be treated as:

Given the following information,use the weighted average method to calculate cost per equivalent unit for the following materials.

In process costing,equivalent units are the same under both the weighted average method and the FIFO method.

For a firm,which produces its product through two processes,the costs in opening work in process for Process 2 are best described as:

The FIFO method is a more accurate method than weighted average because:

Wages paid to a supervisor in a factory are a part of: Prime cost Conversion cost

In a process costing system the cost of abnormal spoilage should be: