Question 1

If a production department has 100 equivalent units of production with respect to direct materials in a given reporting period, the equivalent units of production with respect to direct labor also must be 100.

Accepted Answer

A) True 
 B)False

Question 2

In a process cost accounting system, the entry to record cost of materials assigned to a production department requires a debit to the Raw Materials Inventory account and a credit to the Goods in Process Inventory account for that department.

Accepted Answer

A) True 
 B)False

Question 3

When raw materials are purchased on account for use in a process costing system, the corresponding journal entry that should be recorded will include:

Accepted Answer

A)  A debit to Goods in Process Inventory. 
B)  A debit to Accounts Payable. 
C)  A credit to Cash. 
D)  A debit to Raw Materials Inventory. 
E)  A credit to Raw Materials Inventory.

Question 4

A company's January 1 goods in process inventory contained 30,000 units that were 25% complete with respect to direct labor. The beginning inventory was completed this year and another 120,000 units were started. Of those started, 80,000 were finished and the remaining 40,000 were left 20% complete. Calculate the equivalent units of production for the year using the weighted average method.

Accepted Answer

The answer of A company's January 1 goods in process...

Question 5

The cost of units transferred from Goods in Process Inventory to Finished Goods Inventory is called the cost of goods manufactured.

Accepted Answer

A) True 
 B)False

Question 6

When the completed goods are sold, the cost of the completed goods are transferred to ___________________.

Accepted Answer

The answer of When the completed goods are sold, the...

Question 7

During the year, RB Corp. introduced 132,000 units into production and 144,000 units were completed and transferred to finished goods. At the end of the year, the company had 13,600 units in process that were 80% complete. Determine how many units the company had in goods in process at the beginning of the year.

Accepted Answer

The answer of During the year, RB Corp. introduced 132,000...

Question 8

Hybrid systems contain aspects of both process and job order operations.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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 beginning units that were completed and transferred during August.

Accepted Answer

The answer of Refer to the following information about the...

Question 11

Prepare the required general journal entries to record the following transactions for the Bell Company.
a. Purchased $40,000 of raw materials on account.
b. Used $12,000 of direct materials in the production department.
c. Used $5,000 of indirect materials.

Accepted Answer

The answer of Prepare the required general journal entries to...

Question 12

If the predetermined overhead allocation rate is 85% of direct labor cost, and the Painting Department's direct labor cost for the reporting period is $20,000, the following entry would be made to record the allocation of overhead to the products processed in this department:

Accepted Answer

A) True 
 B)False

Question 13

If Department A uses $10,000 of direct materials and Department B uses $15,000 of direct materials, the following journal entry would be recorded by the process cost accounting system:

Accepted Answer

A) True 
 B)False

Question 14

In process cost accounting, direct labor includes only the labor that is applied directly to the products.

Accepted Answer

A) True 
 B)False

Question 15

Process cost accounting systems are commonly used by companies that manufacture standardized products by passing them through a series of manufacturing steps.

Accepted Answer

A) True 
 B)False

Question 16

What is a hybrid costing system? When is a hybrid costing system appropriate for a manufacturer?

Accepted Answer

The answer of What is a hybrid costing system? When...

Question 17

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 ___________________).

Accepted Answer

The answer of On a process cost summary, the total...

Question 18

Equivalent units of production need to be determined only if a processing department adds materials and labor to its products at different rates.

Accepted Answer

A) True 
 B)False

Question 19

Refer to the following information about the Painting Department in the Richardson Factory for the month of June. Richardson Factory uses the FIFO method of inventory costing.  Compute equivalent units for direct materials, direct labor and overhead for June.

Accepted Answer

The answer of Refer to the following information about the...

Question 20

What is meant by equivalent units of production, and why are they important when a process cost accounting system is used?

Accepted Answer

The answer of What is meant by equivalent units of...

Exam 20: Process Cost Accounting

If a production department has 100 equivalent units of production with respect to direct materials in a given reporting period, the equivalent units of production with respect to direct labor also must be 100.

In a process cost accounting system, the entry to record cost of materials assigned to a production department requires a debit to the Raw Materials Inventory account and a credit to the Goods in Process Inventory account for that department.

When raw materials are purchased on account for use in a process costing system, the corresponding journal entry that should be recorded will include:

The cost of units transferred from Goods in Process Inventory to Finished Goods Inventory is called the cost of goods manufactured.

When the completed goods are sold, the cost of the completed goods are transferred to ___________________.

Hybrid systems contain aspects of both process and job order operations.

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

Prepare the required general journal entries to record the following transactions for the Bell Company. a. Purchased $40,000 of raw materials on account. b. Used $12,000 of direct materials in the production department. c. Used $5,000 of indirect materials.

If the predetermined overhead allocation rate is 85% of direct labor cost, and the Painting Department's direct labor cost for the reporting period is $20,000, the following entry would be made to record the allocation of overhead to the products processed in this department:

If Department A uses $10,000 of direct materials and Department B uses $15,000 of direct materials, the following journal entry would be recorded by the process cost accounting system:

In process cost accounting, direct labor includes only the labor that is applied directly to the products.

Process cost accounting systems are commonly used by companies that manufacture standardized products by passing them through a series of manufacturing steps.

What is a hybrid costing system? When is a hybrid costing system appropriate for a manufacturer?

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 ___).

Equivalent units of production need to be determined only if a processing department adds materials and labor to its products at different rates.

Refer to the following information about the Painting Department in the Richardson Factory for the month of June. Richardson Factory uses the FIFO method of inventory costing. Compute equivalent units for direct materials, direct labor and overhead for June.

What is meant by equivalent units of production, and why are they important when a process cost accounting system is used?