Question 1

In a production cost report,the number of total units to account for consists of ________.The weighted-average method is used.

Accepted Answer

A)  units in process at the beginning of the period and units started or added during the period 
B)  units in process at the end of the period and units started or added during the period 
C)  units in process at the beginning of the period and units remaining at the end of the period 
D)  units of completed and transferred out products and total units produced

Question 2

Companies that manufacture identical items through a series of uniform production steps use ________ to determine cost per unit sold.

Accepted Answer

A)  a process costing system 
B)  a job order costing system 
C)  the weighted-average method 
D)  the first-in, first-out method

Question 3

Provide the formula for (1)To account for and (2)Accounted for.

Accepted Answer

The answer of Provide the formula for (1)To account for...

Question 4

Caldwell,Inc.has two processes-Coloring Department and Mixing Department.The company sold 450 gallons on account at $110 per gallon.The total cost of processing was $385,000 for 5,500 gallons of paint.Throughout the year,the company used a predetermined overhead allocation rate to allocate $80,000 and $90,000 of indirect costs to the Coloring Department and Mixing Department,respectively.The actual overhead costs incurred amounted to $150,000 at the end of the year.What are the journal entries to record the sale of goods and the adjustment for over/underallocated manufacturing overhead at the end of the year if the company follows a process costing system?

Accepted Answer

The answer of Caldwell,Inc.has two processes-Coloring Department and Mixing Department.The...

Question 5

Under a process costing system,direct labor costs are assigned to the Work-in-Process Inventory account of the department for which they are incurred.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true of process costing?

Accepted Answer

A)  It uses one Work-in-Process Inventory account. 
B)  It tracks and assigns both period costs and product costs to units produced. 
C)  It accumulates product costs by production departments. 
D)  It assigns manufacturing overhead costs to products only in the last production process.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A production cost report provides inventory and cost of goods sold data that are needed for the balance sheet.

Accepted Answer

A) True 
 B)False

Question 9

When finished products are sold,Sales Revenue is debited,and Cost of Goods Sold is credited.

Accepted Answer

A) True 
 B)False

Question 10

If a business operates in an industry that experiences significant cost changes,should the business prepare its production cost report using the FIFO method or the weighted-average method? Explain your answer.

Accepted Answer

The answer of If a business operates in an industry...

Question 11

The first-in,first-out (FIFO)method creates better month-to-month cost comparisons than the weighted-average method ________.

Accepted Answer

A)  because it does not recognize transferred in units from other processes 
B)  when there are substantial quantities of units in process at the end of the period 
C)  because it merges costs from the prior period with the current period 
D)  because it is used by industries that do not experience significant cost changes

Question 12

During August,the Filtering Department of Olive,Inc.had beginning Work-in-Process inventory of 180 units with costs of $50,000.595 units were transferred in during the month.It had 100 units in ending Work-in-Process Inventory.Under the first-in,first-out (FIFO)method,current period equivalent units of production for transferred in units in beginning Work-in-Process Inventory of the Filtering Department is ________.

Accepted Answer

A)  0 units 
B)  595 units 
C)  180 units 
D)  100 units

Question 13

In process costing,factory rent and utilities are debited to the ________.

Accepted Answer

A)  Work-in-Process Inventory account 
B)  Manufacturing Overhead account 
C)  Finished Goods Inventory account 
D)  Cost of Goods Sold account

Question 14

The production cost report for Department 2 shows that $452,000 was assigned to the 57,000 units transferred to Finished Goods Inventory.Cost of goods sold equals $452,000.

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

Question 16

The production cost report for Department 2 shows that $453,000 was assigned to the 58,000 units transferred to Finished Goods Inventory.This cost assigned to Finished Goods Inventory is recorded with a debit to Work-in-Process-Department 2.

Accepted Answer

A) True 
 B)False

Question 17

Story Manufacturing produces a chemical pesticide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had a zero beginning balance.During January,42,000 gallons of chemicals were started into production.During the month,33,000 gallons were completed,and 9,000 remained in process,partially completed.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly through the process. During January,the Mixing Department incurred $60,000 in direct materials costs and $250,000 in conversion costs.At the end of the month,the ending inventory in the Mixing Department was 60% complete with respect to conversion costs.First,calculate the equivalent units,then calculate the cost per equivalent unit,and then calculate the total cost of the product that was completed and transferred out during January.The weighted-average method is used.
The total cost of product transferred out was ________.(Round any intermediate calculations two decimal places,and your final answer to the nearest dollar.)

Accepted Answer

A)  $47,143 
B)  $250,000 
C)  $310,000 
D)  $262,020

Question 18

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 19

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

Accepted Answer

A) True 
 B)False

Question 20

The cost per equivalent unit for transferred in units is calculated by dividing total transferred in costs by the equivalent units of production for transferred in units.

Accepted Answer

A) True 
 B)False

Exam 20: Process Costing

In a production cost report,the number of total units to account for consists of ________.The weighted-average method is used.

Companies that manufacture identical items through a series of uniform production steps use ________ to determine cost per unit sold.

Provide the formula for (1)To account for and (2)Accounted for.

Under a process costing system,direct labor costs are assigned to the Work-in-Process Inventory account of the department for which they are incurred.

Which of the following statements is true of process costing?

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

A production cost report provides inventory and cost of goods sold data that are needed for the balance sheet.

When finished products are sold,Sales Revenue is debited,and Cost of Goods Sold is credited.

If a business operates in an industry that experiences significant cost changes,should the business prepare its production cost report using the FIFO method or the weighted-average method? Explain your answer.

The first-in,first-out (FIFO) method creates better month-to-month cost comparisons than the weighted-average method ________.

In process costing,factory rent and utilities are debited to the ________.

The production cost report for Department 2 shows that $452,000 was assigned to the 57,000 units transferred to Finished Goods Inventory.Cost of goods sold equals $452,000.

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

The production cost report for Department 2 shows that $453,000 was assigned to the 58,000 units transferred to Finished Goods Inventory.This cost assigned to Finished Goods Inventory 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.

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

The cost per equivalent unit for transferred in units is calculated by dividing total transferred in costs by the equivalent units of production for transferred in units.