Chapter 17 – Process Costing Review – Flashcards

1. (T/F) A law firm is likely to use process costing for major lawsuits.

2. (T/F) A manufacturer of paintballs is likely to use process costing.

3. (T/F) Both job order and process costing determine product costs at the end of a period of time, rather than when a product is completed.

4. (T/F) Process costing does not keep track of manufacturing overhead.

The Fabricating Department for Outdoor Essentials has the following production and cost data for the current month. - Beginning Work in Process - 0 - Units Transferred Out - 15,000 - Ending Work in Process - 10,000 Materials are entered at the beginning of the process. The ending work in process units are 30% complete as to conversion costs. Compute the equivalent units of production for (a) materials and (b) conversion costs.

Which of the following items is not characteristic of a process cost system? (a)Once production begins, it continues until the finished product emerges. (b)The products produced are heterogeneous in nature. (c)The focus is on continually producing homogeneous products. (d)When the finished product emerges, all units have precisely the same amount of materials, labor, and overhead.

Indicate which of the following statements is not correct. (a)Both a job order and a process cost system track the same three manufacturing cost elements—direct materials, direct labor, and manufacturing overhead. (b)A job order cost system uses only one work in process account, whereas a process cost system uses multiple work in process accounts. (c)Manufacturing costs are accumulated the same way in a job order and in a process cost system. (d)Manufacturing costs are assigned the same way in a job order and in a process cost system.

In a process cost system, the flow of costs is: (a)work in process, cost of goods sold, finished goods. (b)finished goods, work in process, cost of goods sold. (c)finished goods, cost of goods sold, work in process. (d)work in process, finished goods, cost of goods sold.

In making journal entries to assign raw materials costs, a company using process costing: (a)debits Finished Goods Inventory. (b)often debits two or more work in process accounts. (c)generally credits two or more work in process accounts. (d)credits Finished Goods Inventory

(LO 2) In a process cost system, manufacturing overhead: (a)is assigned to finished goods at the end of each accounting period. (b)is assigned to a work in process account for each job as the job is completed. (c)is assigned to a work in process account for each production department on the basis of a predetermined overhead rate. (d)is assigned to a work in process account for each production department as overhead costs are incurred.

(LO 3) Conversion costs are the sum of: (a)fixed and variable overhead costs. (b)labor costs and overhead costs. (c)direct material costs and overhead costs. (d)direct labor and indirect labor costs.

The Mixing Department's output during the period consists of 20,000 units completed and transferred out, and 5,000 units in ending work in process 60% complete as to materials and conversion costs. Beginning inventory is 1,000 units, 40% complete as to materials and conversion costs. The equivalent units of production are: (a)22,600. (b)23,000. (c)24,000. (d)25,000

In RYZ Company, there are zero units in beginning work in process, 7,000 units started into production, and 500 units in ending work in process 20% completed. The physical units to be accounted for are: (a)7,000. (b)7,360. (c)7,500. (d)7,340.

Mora Company has 2,000 units in beginning work in process, 20% complete as to conversion costs, 23,000 units transferred out to finished goods, and 3,000 units in ending work in process complete as to conversion costs. The beginning and ending inventory is fully complete as to materials costs. Equivalent units for materials and conversion costs are, respectively: (a)22,000, 24,000. (b)24,000, 26,000. (c)26,000, 24,000. (d)26,000, 26,000.

(LO 4) Fortner Company has no beginning work in process; 9,000 units are transferred out and 3,000 units in ending work in process are one-third finished as to conversion costs and fully complete as to materials cost. If total materials cost is $60,000, the unit materials cost is: (a)$5.00. (b)$5.45 rounded. (c)$6.00. (d)No correct answer is given.

Largo Company has unit costs of $10 for materials and $30 for conversion costs. If there are 2,500 units in ending work in process, 40% complete as to conversion costs, and fully complete as to materials cost, the total cost assignable to the ending work in process inventory is: (a)$45,000. (b)$55,000. (c)$75,000. (d)$100,000.

A production cost report: (a)is an external report. (b)shows both the production quantity and cost data related to a department. (c)shows equivalent units of production but not physical units. (d)contains six sections.

Unit Materials Cost Formula

Unit Conversion Cost Formula

Total Manufacturing Cost per Unit Formula

Equivalent Units of Production Formula

Unit Cost Formula

Ending Work in Process Formula