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Exam 16: Process Costing and Analysis

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Question 91

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A company uses a process cost accounting system and the Weighted Average inventory valuation method. Its Assembly Department's beginning inventory consisted of 50,000 units, 3/4 complete with respect to direct labor and overhead. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 units that are 1/4 complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. Goods in Process included direct labor costs of $30,000 and overhead costs of $40,000 for the period. The Overhead cost per equivalent unit is:

A) $0.126
B) $0.160
C) $0.178
D) $0.213
E) $0.373

F) A) and D)
G) B) and C)

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Question 92

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The following journal entry would be made to record the use of direct materials in the reporting period covered by the information:

A) True
B) False

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Question 93

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If the indirect materials cost for a reporting period was $37,500, the following journal entry would be recorded by the process cost accounting system:

What are the four steps in accounting for production activity in a period?

The Weighted Average method of process costing computes the cost per equivalent unit based solely on the current period's EUPs and costs.

Refer to the following incomplete table of cost information: -What was the cost of goods transferred out of the Grating Department and into the Bagging Department?

A company uses a process cost accounting system. Its Sewing Department's beginning inventory consisted of 50,000 units (1/4 complete with respect to direct labor and overhead) . The Sewing Department started and finished 120,000 units this period. Its ending inventory consists of 40,000 units (1/4 complete with respect to direct labor and overhead) . All direct materials are added at the beginning of the process. Under FIFO what are the equivalent units of production for the Sewing Department for direct materials and for direct labor and overhead, respectively?

Which of the following five types of products is least likely to be produced in a process manufacturing system?

Equivalent units of production are always the same as the total number of physical units finished during the period.

An equivalent unit of production is an estimate of efforts that is used to calculate the ______________ of each production component.

After posting all actual factory overhead and applying factory overhead to production departments in a process costing system:

The following data are available for Osman Corp. for the current year: Using FIFO, calculate the equivalent units of production for the year.

Hybrid costing systems can only be applied to auto manufacturing.

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 Mixing Department, and $17,000 of direct materials in the Assembly Department. (c.) Used $5,000 of indirect materials.

In a process cost accounting system, a department's production should be measured in terms of equivalent units when its beginning or ending inventory includes goods in process.

When defining direct costs and indirect costs in process costing, it is the process that is the cost object.

In some circumstances, a process cost accounting system can classify wages paid to maintenance workers as direct labor costs instead of factory overhead.

A department had 600 units which were 40% complete in beginning Goods in Process Inventory. During the current period, 7,000 units were transferred out. Ending Goods in Process Inventory was 800 units which were 40% complete. Using the Weighted Average method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process?

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

Refer to the following table of cost information: -The following journal entry would be made to record the use of direct labor in the reporting period covered by the information: