Chapter 20 Quiz – Flashcards

A company uses the weighted-average method for inventory costing. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 100% complete for materials and 75% complete for conversion. The equivalent costs per unit are materials, $2.65 and conversion $5.35. Compute the cost that would be assigned to the ending Work in Process inventory for the period. $146,575. $93,775. $176,000. $87,725. $132,000.

In a process costing system, the purchase of raw materials is debited to the Raw Materials Inventory. True False

Wilturner Company incurs $74,000 of labor related directly to the product in the Assembly Department, $23,000 of labor not directly related to the product but related to the Assembly Department as a whole, and $10,000 of labor for services that help production in both the Assembly and Finishing departments. The amount of direct labor and factory overhead respectively are: rev: 03_29_2016_QC_CS-46663, 09_20_2016_QC_CS-61488 $74,000 and $10,000. $84,000 and $23,000. $107,000 and $0. $97,000 and $10,000. $74,000 and $33,000.

A company uses a process costing system. Its Welding Department completed and transferred out 100,000 units during the current period. The ending inventory in the Welding Department consists of 30,000 units (75% complete with respect to direct materials and 40% complete with respect to conversion costs). Determine the equivalent units of production for the Welding Department for direct materials and conversion costs assuming the weighted average method. 122,500; 112,000 130,000; 130,000 130,000; 112,000 107,500; 118,000 112,500; 130,000

Which of the following characteristics does not usually apply to process operations systems? Costs are computed using equivalent units. The output of all processes except the final process is an input to the next process. Different managers are responsible for different processes. Partially completed products are transferred between processes. Each unit of product is separately identifiable.

The process cost summary presents calculations of the cost of units completed during the reporting period, but does not present any information about the ending Work in Process inventory. True False

A process costing system records all factory overhead costs directly in the Work in Process Inventory accounts. True FalseA process costing system records all factory overhead costs directly in the Work in Process Inventory accounts. True False

A company that applies process costing is most frequently characterized by: Repetitive production and low production volume. Similar products and high production volume. Custom orders and mass production. Low standardization and high production volume. Repetitive production and unique products.

Companies that use a series of repetitive manufacturing processes to produce standardized products should use a process costing system. True False

The following journal entry would be made to record the use of $6,100 of direct labor in a production department during the reporting period: Factory Overhead 6,100 Work in Process Inventory 6,100 True False

Andrews Corporation uses a process costing system for manufacturing. The following information is available for the February in its Polishing Department: Equivalent units of production—direct materials 110,000 EUP Equivalent units of production—conversion 95,000 EUP Costs in beginning Work in Process—direct materials $49,000 Costs in beginning Work in Process—conversion $36,000 Costs incurred in February—direct materials $414,000 Costs incurred in February—conversion 520,000 The cost per equivalent unit of production for conversion is: $5.85 $4.97 $4.21 $5.05 $9.26

The use of process costing is of little benefit to a service type of operation. True False

A process cost summary is a managerial accounting report that describes all but which of the following? The gross profit earned on the sale of products. The equivalent units of production by the department. How the costs were assigned to the output? The costs charged to a department. Physical transfers for a department.

Hybrid systems contain features of both process and job order operations. True False

A production department is an organizational unit that has the responsibility for the complete processing of one particular product. True False

During January, the production department of a process operations system completed and transferred to finished goods a total of 78,000 units. At the end of January, 9,000 additional units were in process in the production department and were 65% complete with respect to labor. The beginning inventory included labor cost of $37,100 and the production department incurred direct labor cost of $294,300 during January. Compute the direct labor cost per equivalent unit for the department using the weighted-average method. $6.34. $3.51. $4.25. $3.77. $3.95.

Which of the following characteristics applies to process costing but not to job order cost accounting? Equivalent units of production. Use of a predetermined overhead rate. Determining cost of goods manufactured. Identifiable units of production. Use of a single Work in Process Inventory account.

During April, the production department of a process operations system completed and transferred to finished goods 18,000 units that were in process at the beginning of April and 90,000 units that were started and completed in April. April's beginning inventory units were 100% complete with respect to materials and 40% complete with respect to labor. At the end of April, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 60% complete with respect to labor. The beginning inventory included materials cost of $107,000 and the production department incurred direct materials cost of $329,000 during the month. Compute the direct materials cost per equivalent unit for the department using the weighted-average method. $3.16. $3.05. $2.57. $4.03. $2.38.

A process cost summary is an accounting report that describes the costs charged to each department, the equivalent units of production by each department, and determining the costs assigned to each department's output. True False

The purchase of raw materials on account in a process costing system is recorded with a: Debit to Purchases and a credit to Accounts Payable. Debit to Raw Materials Inventory and a credit to Accounts Payable. Debit to Work in Process Inventory and a credit to Accounts Payable. Debit to Accounts Payable and a credit to Raw Materials Inventory. Debit to Purchases and credit to Cash.