Ch20 Quiz 4 ACCT 525
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chapter 20 quiz...
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ch20 Student: ___________________________________________________________________________
1. The managers managers of process process manufacturin manufacturing g systems focus focus on the series of processes needed to complete complete the production of products. True False 2. Process manufacturing manufacturing usually usually reflects reflects a manufacturer manufacturer that that produces large quantities quantities of identical identical products. True False 3. To determine determine unit cost cost under a process process cost cost accounting accounting system, system, equivalent equivalent units produced produced must must be calculated if the company has goods in process inventories. True False . !quivalent !quivalent units of production production refer to the number number of units that "ould "ould be completed completed if all all effort effort during a period had been applied only to those units that "ere started and completed in a period. True False #. $n a process process cost accounting accounting system, system, a departmen department%s t%s production production should be measured measured in terms terms of equivalent units "hen its beginning or ending inventory includes goods in process. True False &. !quivalent !quivalent units of production production are al"ays al"ays the same same as the total total number number of physical physical units finished finished during during the period. True False '. !quivalent !quivalent units of production production need to be determined determined only if a processing processing department department adds materials materials and labor to its products at different rates. True False (. !quivalent !quivalent units of production production is an engineering engineering term term used to to describe the process process by "hich one company attempts to manufacture units of a product that are equivalent to the product manufactured by a competitor. True False ). The last step in the the four*step four*step accounting accounting procedure procedure for process process costing costing is the calculation calculation of equivalent equivalent units of production. True False 10. The process cost summary summary is an important managerial managerial accounting report produced produced by a process cost accounting system. True False 11. + process process cost summary is an accounting report report that describes the costs charged to a department, department, the equivalent units of production by the department, and ho" the costs "ere assigned to the output. True False 12. + process process cost summary includes includes the amounts of equivalent units of production production for the period. True False 13. + process process cost summary sho"s the cost of a particular ob manufactured manufactured in the reporting period. period. True False 1. The F$F- method method separates prior period costs from costs costs incurred during the current period. period. True False
1#. $f a department that uses process costing costing starts the reporting period "ith 100,000 100,000 physical units that "ere 20 complete "ith respect to direct labor, it must add (0 direct labor in the current period to complete the units. True False 1&. The F$F- method method does not use the beginning inventory costs in computing the cost per equivalent equivalent unit for the current period. True False 1'. Process and ob order manufacturing operations operations both combine materials, labor, labor, and overhead items in the process of producing products. True False 1(. Process cost accounting accounting systems are commonly commonly used by companies that produce a large volume volume of standardi/ed units on a continuous basis. True False 1). +ccountants +ccountants use the term process cost accounting system because because this system uses a number of trained individuals and computers to process the collected cost information. True False 20. + production production department is an organi/ational organi/ational unit that has the responsibility responsibility for at least partially processing a product. produ ct. True False 21. $n a process cost accounting system, system, "ith the eception of the first department, department, each department receives output from the prior department as a partially processed product. True False 22. hen defining direct direct costs and indirect costs in process costing, it is the process that is the cost obect. True False 23. Process costing costing is applied to operations "ith repetitive repetitive production and heterogeneous products. products. True False 2. $n process cost accounting, accounting, all labor that is applied eclusively in a single production production department is considered to be direct labor. True False 2#. Process cost accounting accounting systems consider consider overhead costs to include those costs that cannot be traced to a specific process. True False 2&. ompanies ompanies that use a series of repetitive manufacturing manufacturing processes to produce standardi/ed products should use a process cost accounting system. True False 2'. Process cost accounting accounting systems are used only by companies that manufacture manufacture physical products meaning that companies and other organi/ations that provide services to their customers do not use process cost accounting. accoun ting. True False 2(. Process cost accounting accounting systems are commonly used by companies that manufacture standardi/ed standardi/ed products by passing passin g them through a series of o f manufacturing steps. True False 2). The use of process costing is of little benefit to a service type of operation. operation.
True True
False
30. $n process cost accounting, accounting, the classification classification of materials as direct or indirect depends depends on "hether they are clearly lin4ed "ith a specific process. True False 31. 5irect costs in process cost accounting accounting include only those costs that can be readily identified identified "ith individual product units. True False
32. Process cost accounting accounting systems consider consider direct costs to include those costs that can be readily identified "ith a particular process. True False 33. $n process cost accounting, accounting, materials are al"ays al"ays classified as indirect if they are not physically incorporated into the final product. True False 3. 6ybrid systems contain aspects of both process and ob order operations. operations.
True True
3#. 6ybrid costing systems can only be applied to auto manufacturing. manufacturing.
False
True True
False
3&. $n a process cost accounting system, system, the purchase of ra" materials is credited credited to the 7a" 8aterials $nventory. True False 3'. $n a process cost accounting system, system, the purchase of ra" materials is debited to the 7a" 8aterials 8aterials $nventory. True False 3(. $n a process cost accounting system, system, the entry to record cost of materials assigned to a production department requires a debit to the 7a" 8aterials $nventory account and a credit to the 9oods in Process $nventory account for that department. True False 3). + materials materials consumption consumption report is a source document that summari/es summari/es the materials used during a reporting period. True False 0. $f 5epartment + uses :10,000 of direct materials and 5epartment ; uses :1#,000 of direct materials, the follo"ing ournal entry "ould be recorded by the process cost accounting system< True False 1. + unique unique feature of process costing systems systems is the use of a single 9oods in Process $nventory $nventory control account "hen more than one production department eists. True False 2. $f 5epartment = uses :&0,000 of direct materials and 5epartment T uses :1#,000 of direct materials, materials, the follo"ing ournal entry "ould be recorded by the process cost accounting system< True False 3. +fter all process cost accounting accounting ournal entries entries are recorded and posted for a reporting period, the Factory Payroll account should have a /ero balance. True False . $f the factory labor cost for a month "as :123,000 >paid in cash?, the follo"ing follo"ing ournal entry "ould be recorded by the process cost accounting system< True False #. $n process cost accounting, accounting, direct labor includes only the labor that is applied directly directly to the products. True
False
&. $n some circumstances, circumstances, a process cost accounting accounting system can classify "ages paid to maintenance maintenance "or4ers as direct labor costs instead of factory overhead. True False '. $n a process costing system, factory factory labor costs incurred in a reporting period are presented presented on the income statement as Factory @abor !pense. True False
(. The follo"ing follo"ing ournal entry "ould be made to record the use of :&,100 of direct labor in a production department during the reporting period< True False ). $f 5epartment 5epartment 9 uses :#3,000 of direct labor and 5epartment 6 uses :21,000 of direct labor, labor, the follo"ing ournal entry "ould be recorded using a process cost accounting system< True False #0. $n a process cost accounting system, system, factory overhead costs can be allocated to production production departments departments by using a predetermined predetermin ed overhead allocation allocatio n rate. True False #1. $f the indirect materials materials cost for a reporting period "as :3',#00, the follo"ing follo"ing ournal entry "ould be recorded in the process cost accounting system< True False #2. $n process costing there is never a balance remaining remaining in Factory -verhead that needs to be closed at period end. True False #3. $n process costing, indirect materials are charged directly to 9oods in Process $nventory. False
True
#. + process process cost accounting system records records all factory overhead costs costs directly in the 9oods in Process $nventory accounts. True False ##. $f the predetermined predetermined overhead allocation allocation rate is 3#0 of direct labor cost and the Painting 5epartment%s 5epartment%s direct labor cost for the reporting period is :20,000, the follo"ing entry "ould record the allocation of overhead to the products processed in this department< True False #&. $f the predetermined predetermined overhead allocation allocation rate is (# of direct labor cost, and the Painting Painting 5epartment%s 5epartment%s direct labor cost for the reporting period is :20,000, the follo"ing entry "ould be made to record the allocation of overhead to the products processed in this department< True False #'. $f the predetermined predetermined overhead allocation allocation rate is 22# of direct labor cost, and the 8iing 5epartment%s 5epartment%s direct labor cost for the reporting period is :10,000, the follo"ing entry "ould be made to record the allocation of overhead to the products processed in this department< True False #(. The number of equivalent equivalent units of production assigned to ending goods in process inventory inventory should be equal to or less than the number of physical units in ending goods in process inventory. True False #). $n the same time period, it is possible that a production department department can produce 1,000 equivalent equivalent finished units "ith respect to direct materials and 1,200 equivalent finished units "ith respect to direct labor. True False &0. $f a production department department has 100 equivalent units of production "ith respect respect to direct materials in a given reporting period, the equivalent units of production "ith respect to direct labor also must be 100. True False &1. -nce equivalent equivalent units are calculated for materials, materials, this number "ill also be used for direct labor and factory overhead. True False
&2. $f a department that applies process process costing starts the reporting period period "ith #0,000 physical units that "ere 2# complete "ith respect to direct materials and 0 complete "ith respect to direct labor, it must add 12,#00 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them. True False &3. -ne section of the process cost summary describes describes the equivalent units units of production for the department during the reporting period and presents the calculations of the costs per equivalent unit. True False &. + process process cost summary for a production production department accounts for all costs assigned to that department during the period plus costs that "ere in the department%s 9oods in Process $nventory account at the beginning of the period. per iod. True False &#. The process cost summary summary presents calculations calculations of the cost of units completed during the reporting reporting period, but does not present p resent any information about a bout the ending goods goo ds in process inventory. invento ry. True False &&. Aince the process cost summary summary describes the activities activities of a production department for a specified specified reporting period, it does not present information about any costs incurred in prior periods. True False &'. The cost of units transferred transferred from 9oods in Process $nventory to Finished Finished 9oods $nventory is called the cost of goods manufactured. True False &(. The Pac4ing 5epartment 5epartment transferred out completed units "ith a cost of :',000. This This transfer should be recorded "ith the follo"ing entry< True False &). hich of the follo"ing follo"ing products products is least li4ely to be produced in a process manufacturing manufacturing systemB systemB ompact dis4s. ;. Alac Alac4s 4s for for casua casuall "ear "ear.. . ;ase ;aseba ball ll hats hats.. 5. alc alcul ulat ator ors. s. !. ust ustom om cab cabin inet ets. s.
+.
'0. hich of the follo"ing characteristics characteristics does not usually apply to process manufacturing manufacturing systemsB systemsB +. !ach unit of product is separately identifiable. ;. Partially Partially completed completed products products are transferred transferred bet"een bet"een processes. processes. . 5ifferent 5ifferent managers managers are responsible responsible for different different processes. processes. 5. The output of all all processes processes ecept the final final process is an input input to the net process. process. !. +ll of these are are characteristic characteristicss of process process manufacturi manufacturing ng systems. systems. '1. 6ou ompany applies applies factory overhead to its production departments departments on the basis of )0 of direct labor costs. $n the +ssembly 5epartment, 6ou had :12#,000 of direct labor cost, and in the Finishing 5epartment, 6ou had :3#,000 of direct labor cost. The entry to apply overhead to these production departments is< + 5ebit Factory Factory -verhead -verhead * +ssembly +ssembly :112,#00 :112,#00 debit Factory Factory -verhead -verhead * Finishing Finishing :31,#00 credit credit . 9oods in Process $nventory :1,000. ; 5ebit Factory Factory -verhead -verhead :1,000 :1,000 credit credit 9oods in in Process Process $nventory * +ssembly +ssembly :112, :112,#00 #00 credit credit . 9oods in Process * Finishing :31,#00. . 5ebit Factory -verhead :1,000 credit Factory Payroll :1,000.
55ebit 9oods in Process $nventory * +ssembly :112,#00 debit 9oods in Process $nventory * Finishing . :31,#00 credit Factory -verhead :1,000. !. 5ebit Factory Payroll :1,000 credit ash :1,000. '2. hich of the follo"ing characteristic characteristicss applies to process cost accounting but not to ob order cost accountingB +. Cse of a pred predeterm etermined ined overh overhead ead rate. rate. ;. $dentifi $dentifiable able lots of produc production tion.. . !quival !quivalent ent units units of producti production. on. 5. @abor @abor time time tic4et tic4et for each each employ employee. ee. !. Cse of a single single 9oods 9oods in Proces Processs $nventory $nventory accoun account. t. '3. + measure measure of the productivity of a process "ith respect to its use of direct materials, materials, direct labor, or overhead, and an epression of the activity of a process as the number of units that "ould have been processed during a period p eriod if all effort had been applied ap plied to units that "ere started star ted and finished during du ring the period, is called< +. 8anufact 8anufacturin uring g overhead overhead.. ;. Cnit Cnitss in pro proce cess ss.. . + ob ob cos costt shee sheet. t. 5. !quival !quivalent ent units units of product production. ion. !. Proce Process ss cost cost sum summa mary ry.. '. !quivalent !quivalent units of production production are equal equal to< + The number of units that could have been completed if all effort had been applied to units that "ere . started and completed during a period. ;. The number number of finished units actually actually produced produced during during a period. . The number number of units introduced introduced into into the process during during a period. period. 5. The number number of units still in process at the end of a period. !. Physical units that that "ere started and completed completed during during a period. period. '#. hich of the follo"ing is the best eplanation eplanation for "hy it is necessary to calculate calculate equivalent units of production in a process proc ess costing environmentB environ mentB +. $n most manufacturing manufacturing environmen environments, ts, it is not possible possible to conduct conduct a physical count count of units. ;. ompanies ompanies often use a combination combination of a process process costing costing and ob order costing costing systems. systems. $n most process costing systems, direct materials are added at the beginning of the process "hile . conversion costs are added evenly throughout the manufacturing process. 5+ll of the "or4 to ma4e a unit 100 complete and ready to move to the net stage of production or to . finished goods inventory may not have been completed in a single time period. !. $n most cases, there is no difference bet"een physical units and equivalent units of production. '&. hich of the follo"ing follo"ing is is not one one of the four steps in accounting for production activity and assigning costs during a period under a process cost systemB +. 5etermine over or underapplied overhead. ;. 5etermi 5etermine ne the physi physical cal flo" flo" of units. units. . ompute ompute equiva equivalen lentt units of produ productio ction. n. 5. ompute ompute the the cost per equiva equivalent lent unit. unit. !. +s +ssig sign n and recon reconcil cilee costs. costs. ''. hich of the follo"ing follo"ing statements statements is most accurateB accurateB + $n process costing, estimating the degree of completion of units is usually more accurate for conversion . costs than for direct materials. ;The "eighted average method uses the stage of completion of the current period%s beginning goods in . process inventory inventor y account in calculating calculatin g equivalent units. units .
The "eighted average method focuses on the total costs and total equivalent units completed to date . this is the maor difference bet"een the "eighted average method and the F$F- method of calculating equivalent units of production. 5The F$F- method of calculating equivalent units of production merges the "or4 and the costs of the . beginning inventory inven tory "ith the "or4 and the costs done during the current cur rent period. ! $t is not possible for there to be a significant difference bet"een the cost of completed units bet"een the . "eighted average and the F$F- methods. '(. + production production department%s department%s output for the most recent month consisted of 10,000 units completed and transferred to the net stage of production and 10,000 units in ending goods in process inventory. The units in ending goods in process inventory "ere #0 complete "ith respect to both direct materials and conversion costs. There "ere 1,000 units in beginning goods in process inventory, and they "ere '0 complete "ith respect to both direct materials and conversion costs. alculate the equivalent units of production for the month, mon th, assuming the company compan y uses the "eighted average averag e method. +. 10,000 units. ;. 10,3 10,300 00 unit units. s. . 1#,0 1#,000 00 unit units. s. 5. 1#,3 1#,300 00 unit units. s. !. 10,' 10,'00 00 uni units ts.. '). The 8achining 5epartment 5epartment started started the current month "ith a beginning goods in process inventory inventory of :10,000. 5uring the month, it "as assigned the follo"ing costs< direct materials, :'&,000 direct labor, :2,000 and factory overhead, #0 of direct labor cost. +lso, +lso, inventory "ith a cost of :10),000 "as transferred transferred out of the department to the net phase in the process. The ending balance of the 9oods in Process $nventory account for the 8achining 5epartment is< +. :13,000. ;. :#&, :#&,00 000. 0. . :#), :#),00 000. 0. 5. :11 :110,00 0,000. 0. !. :1&# :1&#,,000. 00. (0. + company uses a process cost accounting accounting system. $ts +ssembly 5epartment%s 5epartment%s beginning inventory consisted of #0,000 units, 3D complete "ith respect to direct labor and overhead. The department started and finished 12',#00 units this period. The ending inventory consists of 0,000 units that are 1D complete "ith respect to direct labor and overhead. +ll direct materials are added at the beginning of the process. The department incurred direct labor costs of :2,000 and overhead costs of :32,000 for the period. +ssuming the "eighted average method, the direct labor cost per equivalent unit >rounded to the nearest cent? is< +. :0.1. ;. :0.1&. . :0.1'. 5. :0.30. !. :0.3'. (1. + company%s company%s beginning "or4 in process inventory consisted of 20,000 units that "ere 1D# complete "ith respect to direct labor. These beginning units "ere completed and another )0,000 units "ere started during the current period. -f those started, &0,000 "ere finished and the remaining 30,000 "ere 1D3 complete at the end of the period. Csing the "eighted*average method, the equivalent units of production "ith regard regar d to direct labor "ere< +. &0,000. ;. ',000. . '&,000. 5. )0, )0,000. 00. !. )&,000. (2. +t the beginning of the recent period, there "ere "ere )00 units of product in a department, department, one*third completed. These units "ere finished and an additional #,000 units "ere started and completed during the period. (00 units "ere still in process at the end of the period, one*fourth completed. Csing the "eighted average method, the equivalent units produced by the department "ere< +. #,000 units.
;. . 5. !.
#,)0 #,)00 0 unit units. s. &,10 &,100 0 unit units. s. #,#0 #,#00 0 uni units ts.. &,'0 &,'00 0 uni units ts..
(3. + company uses the "eighted average method for inventory costing. 5uring a period, 5epartment + finished and transferred #0,000 units to 5epartment ;. +lso, during the period, 10,000 units "ere started but brought only to a stage of being 3D# completed. The number of equivalent units produced by 5epartment + during the period "as< +. ,000 units. ;. #0,0 #0,000 00 unit units. s. . #,0 #,000 00 unit units. s. 5. #&,0 #&,000 00 unit units. s. !. &0,0 &0,000 00 uni units ts.. (. 8edina orp. uses the "eighted "eighted average method for inventory inventory costs and had the follo"ing information information available for the year. The number of units transferred to finished goods during the year
is< +. 3,20 3,200 0 uni units ts.. ;. 3,00 3,000 0 unit units. s. . 3,0 3,00 0 unit units. s. 5. 3,1& 3,1&0 0 uni units ts.. !. 3,#0 3,#00 0 uni units ts.. (#. 8edina orp. uses the "eighted "eighted average method for inventory inventory costs and had the follo"ing information information available for the year. !quivalent units of production for the year
are< +. 3,20 3,200 0 uni units ts.. ;. 3,32 3,320 0 unit units. s. . 3,2 3,20 0 unit units. s. 5. 3,#2 3,#20 0 uni units ts.. !. 3,(0 3,(00 0 uni units ts.. (&. + company company uses a process cost accounting accounting system. $ts Ae"ing 5epartment completed completed and transferred out 120,000 units during the current period. The ending inventory in the Ae"ing 5epartment consists of 0,000 units >20 complete "ith respect to direct materials and &0 complete "ith respect to direct labor?. -verhead is applied on the basis of direct labor. 5etermine the equivalent units of production for the Ae"ing 5epartment for direct materials, direct labor and overhead assuming the "eighted average method. +. 120,000 120,000 120,000 120,000 120,000 120,000 ;. 120 120,0 ,000 00 1&0, 1&0,000 000 120,000 120,000 . 12( 12(,0 ,000 00 120, 120,000 000 120,000 120,000 5. 12(,000 12(,000 1,000 1,000 1,000 1,000 !. 12( 12(,0 ,000 00 1(, 1(,000 000 1&0,0 1&0,000 00 ('. + process cost summary is a managerial accounting report that describes< a department. ;. The equivalent equivalent units of production production by the department. department. . 6o" the the costs costs "ere "ere assigne assigned d to the outpu output. t. 5. Physica Physicall transfer transferss for a departm department. ent.
+. The costs charged to
!. +ll +ll of of the these se.. ((. +niston !nterprises manufactures stylish hats for sophisticated "omen. +ll +ll materials are introduced at the beginning of the manufacturing process in the utting 5epartment. onversion costs are incurred uniformly throughout the manufacturing process. +s the cutting of material is completed, the pieces are immediately transferred to the Ae"ing 5epartment. $nformation for the utting 5epartment for the month of 8ay follo"s. 9oods in Process, 8ay 1 >#0,000 units, 100 complete for direct materials, 0 complete "ith respect to direct labor and overhead >conversion costs? includes :'0,#00 of direct material cost :3,0#0 of conversion costs?. 9oods in Process, 8ay 31 >'#,000 units, 100 complete for direct materials 20 complete for conversion costs?. $f +niston !nterprises uses the F$F- method of process costing, compute the cost per equivalent unit for direct materials and conversion costs respectively for 8ay. +. :1.#2 :1.(1. ;. :1.# :1.#0 0 :1.' :1.'&. &. . :1.( :1.(3 3 :1.' :1.'2. 2. 5. :1.' :1.'1 1 :1.( :1.(1. 1. !. :3.3 :3.30 0 :3. :3.30 30.. (). +niston !nterprises manufactures stylish hats for sophisticated "omen. +ll +ll materials are introduced at the beginning of the manufacturing process in the utting 5epartment. onversion costs are incurred uniformly throughout the manufacturing process. +s the cutting of material is completed, the pieces are immediately transferred to the Ae"ing 5epartment. $nformation for the utting 5epartment for the month of 8ay follo"s. 9oods in Process, 8ay 1 >#0,000 units, 100 complete for direct materials, 0 complete "ith respect to direct labor and overhead includes :'0,#00 of direct material cost :3,0#0 of conversion costs?. 9oods in Process, 8ay 31 >'#,000 units, 100 complete for direct materials 20 complete for conversion costs?.
$f +niston !nterprises uses the F$F- method of process costing, compute the equivalent units for materials and conversion costs respectively for 8ay. +. ;. . 5. !.
22#,000 22#,0 00 22# 22#,0 ,000. 00. 200, 200,00 000 0 1)#, 1)#,00 000 0 2'#, 2'#,00 000 0 200, 200,00 000 0 22#,0 22# ,000 00 1)# 1)#,0 ,000 00 200, 200,00 000 0 200 200,0 ,000 00
)0. The follo"ing follo"ing data are available for a company%s manufacturing manufacturing
activities< $f mater materia ials ls are are added added "hen "hen the produc producti tion on proce process ss begins begins and direct direct labor labor is applie applied d unifo uniform rmly ly throughout the process, "hat are the equivalent units for direct materials and for direct labor, respectively using the F$F- method of process costingB +. 1&,2#0 1),2#0. ;. 1&,2 1&,2#0 #0 21,' 21,'#0 #0..
. 21,0 21,000 00 1),2 1),2#0 #0.. 5. 1),2#0 1),2#0 1(,'#0 1(,'#0.. !. 21,0 21,000 00 22, 22,2# 2#0. 0. )1. + system system of accounting in "hich the costs of each process are accumulated accumulated and then assigned to the units of product that passed through the process is a< +. 9eneral cost accounting system. ;. Process Process cost cost accou accountin nting g system system.. . Eob order order cost accounti accounting ng system system.. 5. 8anufact 8anufacturin uring g cost accountin accounting g system. system. !. 9oods 9oods in process process accou accountin nting g system system.. )2. + company that applies process costing is most frequently characteri/ed characteri/ed by< and high production volume. ;. ustom ustom orders orders and homoge homogeneou neouss products. products. . 7epetit 7epetitive ive producti production on and heterogene heterogeneous ous products. products. 5. 7epetitive 7epetitive production production and lo" lo" production production volume. !. 6omogen 6omogeneous eous produc productt and high high producti production on volume. volume.
+. @o" standardi/ation standardi/ation
)3. +n organi/ational organi/ational unit of a factory that has the responsibility for partially partially manufacturing manufacturing or producing a product is called a< +. Producti Production on departm department. ent. ;. Aervi Aervice ce depa departm rtment ent.. . Prim Primary ary depart departme ment. nt. 5. 7esponsi 7esponsibili bility ty depar departme tment. nt. !. ontr ontrol ol depart departme ment nt.. ). + hybrid hybrid costing system "ould be most appropriate appropriate "hen< +.+ manufacturer is able to standardi/e processes "hile at the same time attempting to meet individual customer needs. ;. @arge quantities quantities of identical products are being being produced. produced. . The volume volume of produc production tion is is lo" and costs costs are high. high. 5. There is no standardi/ation standardi/ation of units units of production. production. !. +ll of these these "ould "ould necessita necessitate te a hybrid hybrid costing costing system. system. )#. $n a process cost accounting accounting system, direct material costs incurred are recorded< a 9oods in Process $nventory account. ;. $ndirect $ndirectly ly to a Finished Finished 9oods 9oods $nventory $nventory accoun account. t. . 5irectl 5irectly y to a 9oods in Process Process $nvent $nventory ory account account.. 5. 5irectly to a Finished 9oods $nventory $nventory account. !. 5irectl 5irectly y to a ost ost of of 9oods 9oods Aold Aold account account..
+. $ndirectly $ndirectly to
)&. The purchase of ra" materials materials on account in a process costing system is recorded "ith a< to Purchases and credit to ash. ;. 5ebit to to Purchases Purchases and a credit credit to +ccounts +ccounts Payable. Payable. . 5ebit to 7a" 8aterials 8aterials $nventory $nventory and a credit to to +ccounts +ccounts Payable. Payable. 5. 5ebit to +ccounts +ccounts Payable Payable and a credit to 7a" 7a" 8aterials 8aterials $nventory. $nventory. !. 5ebit to 9oods in Process Process $nventory $nventory and and a credit to to +ccounts +ccounts Payable. Payable.
+. 5ebit
)'. hen ra" materials materials are purchased on account for use in a process costing system, the corresponding corresponding ournal entry that should sh ould be recorded "ill include< inc lude< +. + debit to 9oods in Process $nventory. $nv entory. ;. + debit debit to +ccoun +ccounts ts Payable Payable..
. + cre credi ditt to as ash. h. 5. + debit debit to 7a" 8ateri 8aterials als $nventor $nventory y. !. + credi creditt to 7a" 8aterial 8aterialss $nventor $nventory y. )(. 5irect labor and indirect labor are recorded, respectively, to< +. Factory -verhead and 9oods in Process $nventory. ;. 9oods in Process $nventory and Finished Finished 9oods 9oods $nventory $nventory.. . Finished 9oods $nventory and 9oods 9oods in Process Process $nventory $nventory.. 5. 9oods in in Process Process $nventory $nventory and Factory Factory -verhead. !. ost of of 9oods 9oods Aold and and Finished Finished 9oods 9oods $nvent $nventory ory.. )). $n a process operation, the direct labor of a production department department includes< includes< +. +ll labor used used eclusively eclusively by that department, department, even even if the labor is not not applied to the the product itself. ;. +ll labor used used eclusively eclusively by that department, department, but only only if the labor labor is applied to the the product itself.+ll labor for that department, including labor for services that help more than one production . department, depar tment, such as clerical, repair, repai r, and computer technicians. 5.-nly labor that helps more than one production department, such as clerical, repair, and computer technicians. !. -nly that labor that is recorded in the Factory Payroll account. 100.+fter posting all actual factory overhead and applying factory overhead to production departments in a process costing system, s ystem, +. There There "ill never never be underapp underapplie lied d overhead. overhead. ;. There There "ill "ill never be be overappli overapplied ed overhead overhead.. . There There "ill al"ay al"ayss be underappli underapplied ed overhead overhead.. 5. There There "ill al"ay al"ayss be overapplie overapplied d overhead. overhead. !. There There may be be over or or underapp underapplied lied overh overhead ead.. 101.$n a process costing system, "hen manufacturing overhead costs are applied to the cost of production, they are debited to< +. the Finish Finished ed 9oods 9oods $nventor $nventory y account. account. ;. the ost ost of of 9oods 9oods Aold Aold account. account. . the 9oods 9oods in in Process Process $nvent $nventory ory accoun account. t. 5. the 8anufac 8anufacturi turing ng -verhead -verhead accou account. nt. !. the 7a" 7a" 8ater 8aterials ials $nven $nventory tory account. account. 102.To compute equivalent units of production, one must be able to reasonably estimate< +. The percentage of completion. ;. Cnit Cnitss compl complet eted ed.. . Cnits Cnits sstart tarted ed and complet completed. ed. 5. 5irec 5irectt labo laborr cost cost.. !. 8ate 8ateri rial alss cos cost. t. 103.The follo"ing is an account for a production department, sho"ing its costs for one
month< +ssume that materials materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. $f the units in ending goods in process inventory cost :,#)0, and the
started and completed units cost :1,(#0, "hat "as the cost of completing the units in the beginning goods in process inventoryB +. :12,1#0. ;. :2,1&0. . :',#&0. 5. :#, :#,00 000. 0. !. :3',2&0. 10.=ue orporation uses a process cost accounting system. The company manufactured certain goods at a cost of :(00 and sold them on credit to +re orporation for :1,0'#. The complete ournal entry to be made by =ue at the time of this sale is< +.5ebit +ccounts 7eceivable :1,0'# credit Aales :1,0'# debit ost of 9oods Aold :(00 credit Finished 9oods $nventory :(00. ;. 5ebit +ccounts +ccounts 7eceivable 7eceivable :1,0'# :1,0'# credit credit Aales :2'# credit Finished Finished 9oods $nventory $nventory :(00. . 5ebit ost of 9oods 9oods Aold :1,0'# credit Aales :1,0'#. 5.5ebit Finished 9oods $nventory :(00 debit Aales :1,0'# credit +ccounts 7eceivable :1,0'# credit ost of 9oods Aold :(00. !.5ebit +ccounts 7eceivable :1,0'# debit Aelling epense :(00 credit Aales :1,0'# credit ost of 9oods Aold :(00. 10#.!mbar4 produces mulch for landscaping use. The follo"ing information summari/es production operations for Eune. The ournal entry to record Eune production activities for direct material usage
is< +. ;. . 5. !.
5ebit 7a" 8aterial 8aterialss $nventory :(',000 :(',000 credit credit +ccounts +ccounts Payable Payable :(',000. :(',000. 5ebit 7a" 7a" 8aterials 8aterials $nventory $nventory :(',000 :(',000 credit Finished Finished 9oods $nventory $nventory :(',000. :(',000. 5ebit ost ost of 9oods 9oods Aold :(',000 :(',000 credit credit Finished Finished 9oods 9oods $nventory :(',000. 5ebit 9oods 9oods in Process $nventory $nventory :(',000 :(',000 credit 7a" 7a" 8aterials 8aterials $nventory $nventory :(',000. 5ebit 9oods 9oods in Process Process $nventory $nventory :(',000 :(',000 credit ost of 9oods Aold Aold :(',000.
10&.!mbar4 produces mulch for landscaping use. The follo"ing information summari/es production operations for Eune. The ournal entry to record Eune production activities for direct labor usage
is< +. ;. . 5. !.
5ebit Factory Factory Payroll :1&0,000 credit ash ash :1&0,000. :1&0,000. 5ebit 9oods 9oods in Process Process $nventory $nventory :1&0,000 :1&0,000 credit credit Factory Payroll :1&0,000. 5ebit ost ost of 9oods 9oods Aold :1&0,000 :1&0,000 credit credit Factory Factory Payroll Payroll :1&0,000. :1&0,000. 5ebit 9oods 9oods in Process $nventory $nventory :1&0,000 :1&0,000 credit 7a" 7a" 8aterials 8aterials $nventory $nventory :1&0,000. 5ebit 9oods in Process Process $nventory $nventory :1&0,000 credit ash :1&0,000. :1&0,000.
10'.!mbar4 produces mulch for landscaping use. The follo"ing information summari/es production operations for Eune. The ournal entry to record Eune production activities for overhead allocation
is< +. ;. . 5. !.
5ebit Factory Factory -verhead :2(,000 credit ash :2(,000. :2(,000. 5ebit 9oods 9oods in Process Process $nventory $nventory :1&0,000 :1&0,000 credit credit Factory Payroll :1&0,000. 5ebit 9oods 9oods in Process Process $nventory $nventory :2(,000 :2(,000 credit credit Factory -verhead :2(,000. 5ebit 9oods 9oods in Process $nventory $nventory :1&0,000 :1&0,000 credit Factory Factory -verhead -verhead :1&0,000. :1&0,000. 5ebit 9oods in Process Process $nventory $nventory :1&0,000 credit ash :1&0,000. :1&0,000.
10(.!mbar4 produces mulch for landscaping use. The follo"ing information summari/es production operations for Eune. The ournal entry to record Eune production activities for goods transfer from
production to finished fin ished goods is< +. 5ebit Finished Finished 9oods $nventory $nventory :32,000 :32,000 credit credit 9oods in Process Process $nventory $nventory :32,000. :32,000. ;. 5ebit 9oods 9oods in Process $nventory $nventory :,000 :,000 credit Finished Finished 9oods 9oods $nventory :,000. . 5ebit 9oods 9oods in Process $nventory $nventory :32,000 :32,000 credit Finished Finished 9oods 9oods $nventory :32,000. 5. 5ebit Finished Finished 9oods $nventory $nventory :,000 :,000 credit credit 9oods in Process Process $nventory $nventory :,000. :,000. !. 5ebit 9oods in Process Process $nventory $nventory :32,000 credit ash :32,000. :32,000. 10).!mbar4 produces mulch for landscaping use. The follo"ing information summari/es production operations and sales activities for Eune. The ournal entry to record Eune sales
is< +. 5ebit +ccounts +ccounts 7eceivable 7eceivable :(10,000 :(10,000 credit credit ost of 9oods 9oods Aold :(10,000. :(10,000. ;. 5ebit +ccounts +ccounts 7eceivable 7eceivable :(10,000 :(10,000 credit Aales Aales :3&&,000 credit credit Finished 9oods 9oods $nventory :,000. . 5ebit ost ost of 9oods Aold Aold :,000 :,000 credit credit Aales Aales :,000. :,000. 5 5ebit Finished Finished 9oods 9oods $nventory $nventory :,000 :,000 debit Aales :(10,000 :(10,000 credit credit +ccounts +ccounts 7eceivable 7eceivable . :(10,000 credit ost of 9oods Aold :,000. ! 5ebit +ccounts +ccounts 7eceivable 7eceivable :(10,000 credit Aales :(10,000 :(10,000 debit ost ost of 9oods Aold Aold :,000 credit . Finished 9oods $nventory :,000. 110.5uring 8arch, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. -f the units transferred, 2#,000 "ere in process at the beginning of 8arch and 110,000 "ere started and completed in 8arch. 8arch%s beginning inventory units "ere 100 complete "ith respect to materials and ## complete "ith respect to labor. +t the end of 8arch, 30,000 additional units "ere in process in the production department and "ere 100 complete "ith respect to materials and 30 complete "ith respect to labor. ompute the number of units transferred to finished goods. +. 110,000. ;. 13#, 13#,00 000. 0. . 10#, 10#,00 000. 0. 5. 1&#, 1&#,00 000. 0.
!. 1,000. 111.5uring 8arch, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. -f the units transferred, 2#,000 "ere in process at the beginning of 8arch and an d 110,000 "ere started and completed in 8arch. 8arch%s beginning inventory units "ere 100 complete "ith respect to materials and ## complete "ith respect to labor. +t the end of 8arch, 30,000 additional units "ere in process in the production department and "ere 100 complete "ith respect to materials and 30 complete "ith respect to labor. ompute the number of equivalent units "ith respect to both materials and direct labor respectively for 8arch using the "eightedaverage method. +. ;. . 5. !.
1&#,000 1&#,0 00 1&# 1&#,0 ,000. 00. 13#,0 13# ,000 00 11),0 11),000. 00. 10,0 10 ,000 00 130 130,2 ,2#0. #0. 1&#,0 1&# ,000 00 1 1,0 ,000. 00. 1, 1,00 000 0 1, 1,00 000. 0.
112.5uring 8arch, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. -f the units transferred, 2#,000 "ere in process at the beginning of 8arch and 110,000 "ere started and completed in 8arch. 8arch%s beginning inventory units "ere 100 complete "ith respect to materials and ## complete "ith respect to labor. +t the end of 8arch, 30,000 additional units "ere in process in the production department and "ere 100 complete "ith respect to materials and 30 complete "ith respect to labor. The production department incurred direct materials cost of :2#3,000 and its beginning inventory included materials cost of :)3,#00. ompute the direct materials cost per equivalent unit for the department using the "eighted*average method. +. :1.#3. ;. :2.(. . :2.10. 5. :2.#'. !. :2.0. 113.5uring 8arch, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. -f the units transferred, 2#,000 "ere in process at the beginning beginn ing of 8arch and 110,000 "ere started and a nd completed in 8arch. 8arch%s 8arch% s beginning inventory units "ere 100 complete "ith respect to materials and ## complete "ith respect to labor. +t the end of 8arch, 30,000 additional units "ere in process in the production department and "ere 100 complete "ith respect to materials and 30 complete "ith respect to labor. The production department incurred direct labor cost of :#'(,)00 and its beginning inventory included labor cost of :#,'00. ompute the direct labor cost per equivalent unit for the department using the "eighted*average method. +. :.&). ;. :3.(. . :.(&. 5. :.2(. !. :.0. 11.5uring 8arch, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. -f the units transferred, 2#,000 "ere in process at the beginning beginn ing of 8arch and 110,000 "ere started and a nd completed in 8arch. 8arch%s 8arch% s beginning inventory units "ere 100 complete "ith respect to materials and ## complete "ith respect to labor. +t the end of 8arch, 30,000 additional units "ere in process in the production department and "ere 100 complete "ith respect to materials and 30 complete "ith respect to labor. ompute the number of equivalent units "ith respect to both materials and direct labor respectively for 8arch using the F$Fmethod. +. 1&# 1&#,0 ,000 00 1&# 1&#,0 ,000. 00. ;. 13# 13#,0 ,000 00 11),0 11),000. 00.
. 10,0 10,000 00 130 130,2 ,2#0. #0. 5. 1&# 1&#,0 ,000 00 1 1,0 ,000. 00. !. 1, 1,00 000 0 1, 1,00 000. 0. 11#.+ company uses the "eighted average method for inventory costing. 5uring a period, a production department department had 20,000 units in beginning goods in process inventory "hich "ere 0 complete complete the department completed and transferred 1&#,000 units. +t the end of the period, 22,000 units "ere in the ending goods in process inventory and are '# complete. ompute the number of equivalent units produced by the department. dep artment. +. 1(1,#00. ;. 1&#, 1&#,00 000. 0. . 1'3, 1'3,#0 #00. 0. 5. 1#, 1#,00 000. 0. !. 1(',000. 11&.+ 11& .+ company company uses the F$F- method for inventory costing. 5uring a period, a production department had 20,000 units in beginning goods in process inventory "hich "ere 0 complete the department completed and transferred 1&#,000 units. +t the end of the period, 22,000 units "ere in the ending goods in process inventory and are '# complete. ompute the number of equivalent units produced by the department. +. 1(1,#00. ;. 1&#, 1&#,00 000. 0. . 1'3, 1'3,#0 #00. 0. 5. 1#, 1#,00 000. 0. !. 1(',000. 11'.+ company uses the "eighted average method for inventory costing. 5uring a period, a production department had 20,000 units in beginning goods in process inventory "hich "ere 0 complete the department completed and transferred 1&#,000 units. +t the end of the period, 22,000 units "ere in the ending goods in process inventory and are '# complete. +ll of these are "ith respect to labor. The production department dep artment had labor costs cos ts in the beginning goods is process inventory of :)),000 :)),00 0 and total labor costs added during the period are :'2&,(2#. ompute the equivalent cost per unit for labor. +. :.0. ;. :.'&. . :.1). 5. :.##. !. :.&1. 11(.+ 11( .+ company company uses the F$F- method for inventory costing. 5uring a period, a production department had 20,000 units in beginning goods in process inventory "hich "ere 0 complete the department completed and transferred 1&#,000 units. +t the end of the period, 22,000 units "ere in the ending goods in process inventory and are '# complete. +ll of these are "ith respect to labor. The production department department had labor costs in the beginning goods is process inventory of :)),000 and total labor costs added during the period are :'2&,(2#. ompute the equivalent cost per unit for labor. labor. +. :.0. ;. :.'&. . :.1). 5. :.##. !. :.&1. 11).+ 11) .+ company company uses the "eighted*average "eighted*average method for inventory costing. +t the end of the period, 22,000 units "ere in the ending goods in process inventory and are 100 complete for materials and '# complete for labor and overhead. The equivalent costs per unit are materials, :2.&#, labor, :2.1#, and overhead, :3.20. ompute the cost that "ould be assigned to the ending goods in process inventory for the period. +. :1&,#'#. ;. :1'& :1'&,,000. 00. . :(', :(','2 '2#. #. 5. :)3, :)3,'' ''#. #.
!. :132 :132,,000. 00. 120.8atch the follo"ing terms "ith the definitions. 1. osting system to determine the cost of producing each ob or ob lot
!qu ivalent units of productio n. 2. + manufacturing system that contains features of both process Eob order cost and ob order systems. accountin g system 3. 7eport of costs charged to a department, its equivalent units of 6ybrid manufa production achieved, achiev ed, even the costs cturing system . Process of products in a continuous flo" of steps. Pr ocess manufa cturing system #. 5ocument that summari/es the materials a department uses Proc ess cost during a reporting period replaces materials requisition. accountin g system &. Aystem of assigning direct materials, direct labor, and overhead 8a to specific processes total costs associated "ith each process are terials then divided by the number of units passing through that process consumpti to determine cost per equivalent unit. on report '. Gumber of units that "ould be completed c ompleted if all effort during a Proc period had been applied appl ied to units that "ere started and finished. ess cost summary
121.hat is meant by equivalent units of production, and "hy are they important "hen a process cost accounting system is usedB
122.hat are the four steps in accounting for production activity in a periodB
123.hy is the Process ost Aummary important to management and ho" does the Process ost Aummary accomplish its purposesB
12.;riefly eplain the conditions under "hich ob order cost accounting systems and process cost accounting systems are commonly applied.
12#.Eob order manufacturing and process manufacturing are t"o maor costing systems used in manufacturing. ;riefly contrast the characteristics of these t"o systems.
12&.hat is a hybrid costing systemB hen is a hybrid costing system appropriate for a manufacturerB
12'.5escribe the flo" of materials in a process cost accounting system, including accounts used.
12(.5escribe the flo" of labor in a process cost accounting system, including accounts used.
12).5escribe the flo" of overhead costs in a process cost accounting system, including accounts used.
130.+ company%s Eanuary 1 goods in process inventory contained 30,000 units that "ere 2# complete "ith respect to direct labor. The beginning inventory "as completed this year and another 120,000 units "ere started. -f those started, (0,000 "ere finished and the remaining 0,000 "ere left 20 complete. alculate the equivalent units of production for the year using the "eighted average method.
131.The follo"ing data is available for -sman orp. for the current
year< alculate the equivalent units of production for the year using the "eighted average method.
132.+ company uses a process cost accounting system and the "eighted average method for inventory costs. The follo"ing information is available regarding direct labor for the current
year< >a? alculate alculate the equivalent units units of production for direct direct labor for the year. year. >b? alculate alculate the average cost per equivalent equivalent unit for direct direct labor >round to the nearest cent?. cent?.
133.7efer to the follo"ing information about the Painting 5epartment in the 7ichardson Factory for the month of Eune. 7ichardson Factory uses the F$F- method of inventory
costing. ompute equivalent units for direct materials, direct labor and overhead for Eune.
13.7efer to the follo"ing information about the Painting 5epartment in the 7ichardson Factory for the month of Eune. 7ichardson Factory uses the F$F- method of inventory
costing. ompute the equivalent cost per unit for direct materials, direct labor and overhead for Eune. 13#.7efer to the follo"ing information about the Painting 5epartment in the 7ichardson Factory for the month of Eune. 7ichardson Factory uses the F$F- method of inventory
costing. ompute the total cost of all units that "ere completed and transferred to finished goods during Eune. ompute the total cost of the ending goods in process inventory.
13&.7efer to the follo"ing information about the Painting 5epartment in the 7ichardson Factory for the month of Eune. 7ichardson Factory uses the "eighted*average method of inventory
costing. ompute the total cost of all units that "ere completed and transferred to finished goods during Eune. ompute the total cost of the ending goods in process inventory.
13'.+ company%s Eanuary 1 goods in process inventory contained 30,000 units that "ere 2# complete "ith respect to direct labor. The beginning inventory "as completed this year and another 120,000 units "ere started. -f those started, (0,000 "ere finished and the remaining 0,000 "ere 20 complete. alculate the equivalent units of production for the year using the F$F- method.
13(.Prepare the required general ournal entries to record the follo"ing transactions for the ;ell ompany. a. Purchased :0,000 of ra" materials on account. b. Csed :12,000 of direct direc t materials in the production productio n department. c. Csed Csed :#,000 :#,000 of of indire indirect ct mater material ials. s.
13).Prepare the required general ournal entry to record the follo"ing transactions for the Flaherty ompany. a. $ncurre $ncurred d :)#,000 :)#,000 of facto factory ry labor labor cost cost "hich "hich is paid paid in cash. cash. b. Csed :'(,000 of direct direc t labor in the production productio n department. c. Csed Csed :1',00 :1',000 0 of indir indirect ect labo laborr.
10.$olaus ompany provides the follo"ing data for the current
year< 7equired< a. alculate alculate the predetermined predetermined overhead overhead allocation allocation rate based on on direct direct labor. labor. b. 5etermine the amount of overhead ove rhead applied to production. prod uction. c. Prepare Prepare the the ournal ournal entry entry to apply apply factory factory overhe overhead ad to goods goods in process. process.
11.7efer to the follo"ing information about the 5ipping 5epartment of the $ndiana Factory for the month of +ugust. $ndiana Factory uses the F$F- 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. ompute the cost that should be assigned to the beginning units that "ere completed and transferred during +ugust.
12.7efer to the follo"ing information about the 5ipping 5epartment of the $ndiana Factory for the month of +ugust. $ndiana Factory uses the F$F- 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. ompute the cost that should be assigned to the units that "ere started and completed during +ugust.
13.7efer to the follo"ing information about the 5ipping 5epartment of the $ndiana Factory for the month of +ugust. $ndiana Factory uses the F$F- 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. ompute the cost that should be assigned all units that "ere completed and transferred during +ugust.
1.7efer to the follo"ing information about the 5ipping 5epartment of the $ndiana Factory for the month of +ugust. $ndiana Factory uses the F$F- 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. ompute the cost that should be assigned to the ending goods in process inventory for +ugust.
1#.7efer to the follo"ing information about the 5ipping 5epartment of the $ndiana Factory for the month of +ugust. $ndiana Factory uses the F$F- 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. Prepare a cost reconciliation for the month of +ugust.
1&.Gano ompany uses a "eighted average process cost system. The department started and finished 1),000 units during the current period. The ending inventory consists of &0,000 units that are '# complete "ith respect to direct labor and overhead. +ll direct materials are added at the beginning of the process. The department incurred incurre d direct labor costs of :2&2,#00 : 2&2,#00 and overhead overhe ad costs of :12&,000.>a? :12&,000. >a? ompute the equivalent cost per unit for direct labor. >b? ompute the equivalent cost per unit for overhead.
1'.6eesac4er, $nc. uses a process cost accounting system. The follo"ing operating and cost data occurred
during -ctober< 8aterials are added at the beginning of the process. 5irect labor and overhead are incurred evenly throughout the process. Prepare the -ctober process cost summary assuming the "eighted average method of inventory costing.
1(.@ipins4i ompany completed and transferred )0,000 units during the current period. ;ased on the follo"ing information, determine the cost of the goods completed during the current reporting period and
ournali/e the transfer. trans fer. +ns"er< +ns"ers "ill vary Feedbac4< Finished 9oods $nventory, (,1)0,000 9oods in Process $nventory, (,1)0,000
Calculations
1).;ro"ning ompany had (,'00 units in beginning inventory "ith accumulated costs for direct materials of :1',)00, :1&,#00 direct labor, and :13,200 of overhead. 5uring Euly, the company completed and transferred #0,000 units to finished goods. osts incurred in the current period included :#,000 of direct materials, :#(,#00 of direct labor, and :&,(00 of factory overhead. !nding inventory consisted of 12,000 units "hich "ere (0 complete "ith respect to materials and #0 complete "ith respect to labor and overhead. ompute the value assigned to ending inventory based on the "eighted average method of inventory costing.
1#0.5uring the year, 7; orp. introduced 132,000 units into production and 1,000 units "ere completed and transferred to finished goods. +t the end of the year, the company had 13,&00 units in process that
"ere (0 complete. 5etermine ho" many units the company had in goods in process at the beginning of the year.
1#1.The follo"ing table of cost information is available for the 8essier ompany for the month of
Govember< ;ased on the table of cost information above, prepare the general ournal entry required to record the< a. Transfer of goods from the molding department to the finished goods inventory. b. ost of goods sold for Govember. Go vember.
1#2.Prepare general ournal entries to record the follo"ing production activities for Aherman 8anufacturing. a. Purchased :(2,000 of ra" materials on credit. b. Csed :&3,#00 of direct direc t materials in production. production . c. Csed :12,(00 :12,(00 of indirect indirect materia materials. ls.
1#3.Prepare ournal entries to record the follo"ing production activities for Aherman 8anufacturing. a. $ncurre $ncurred d :10#,100 :10#,100 of fact factory ory labor labor cost cost "hich "hich is paid paid in cash. cash. b. Csed :)3,)00 of direct direc t labor in the production productio n department. c. Csed :11 :11,20 ,200 0 of of indir indirect ect labor. labor.
1#.Prepare ournal entries to record the follo"ing production activities for Aherman 8anufacturing. a. $ncurre $ncurred d overhead overhead costs costs of :'),0 :'),000 00 >paid >paid in cash?. cash?. b. +pplied overhead at 110 of direct labor lab or costs "hich are :)3,)00. :)3,)0 0. c. Transferred Transferred completed completed products products "ith a cost of :2#(,200 :2#(,200 to finished finished goods inventory inventory.. d. Aold Aold :&02,000 :&02,000 of of product product on credi credit. t. ost ost is :2'1,0 :2'1,000. 00.
1##.6arbor 8anufacturing ompany uses a process cost accounting system. 8aterials are added at the beginning of the process. pro cess. 5irect labor and overhead ov erhead are added evenly even ly throughout the process. p rocess. The company uses monthly reporting periods for its "eighted*average process cost accounting. The follo"ing are the operating and cost data information for -ctober. The -ctober 1 beginning 9oods in Process $nventory consisted of 20,000 units. The costs for this inventory are :(2,#00 of direct materials, :2,00 of direct labor, and :(,(00 of factory overhead. Factory overhead is applied at 200 of direct labor cost. $n addition to the beginning inventory costs, the company issued the follo"ing costs into 9oods in Process $nventory direct materials, :20,000 direct labor, :&(,000 factory overhead, :13&,000.5uring :13&,000. 5uring -ctober, the company completed and transferred &0,000 units of its product to finished goods. +t the end of the month, the goods in process inventory consisted of 1#,000 units that "ere 0 complete "ith respect to direct labor and factory overhead and 100 complete "ith respect to materials. Prepare the company%s process cost summary for -ctober using the "eighted average method. 1#&.Process manufacturing, also called process operations or process production, is the production of products in a flo" of steps. 1#'.+n equivalent unit of production is an estimate of efforts that is used to calculate the of each production component. 1#(.$f a process has or inventory of partially completed production, equivalent units must be calculated so that total costs incurred during the period are assigned to all units "or4ed on. 1#).The first step in accounting for production activity in a period, , is a reconciliation of the physical units started in a period "ith the physical physi cal units completed in that tha t period. 1&0.The second step in accounting for production activity in a period is to compute .
1&1.The third step in accounting for production activity in a period is to compute the . . 1&2.The fourth step in accounting for production activity in a period is to prepare a cost reconciliation, "hich reconciles "ith the . 1&3.8aterials and labor costs that are clearly associated "ith a specific process are 4no"n as . . Those costs that are not no t clearly associated "ith a specific s pecific process are called ca lled . . 1&.+ contains features of both process and ob order operations. 1&#.$n a process costing accounting system, direct materials used are debited to the account, acco unt, and indirect materials used are debited to the account. acco unt. 1&&.$n a manufacturing operation "ith t"o process departments >1 and 2?, the flo" of costs "ould proceed from 9oods in Process, 5ept H1 to . 1&'.$n a process costing accounting system, factory "ages are debited to , and "hen direct labor is used, that account is credited and is debited. hen indirect labor is used, the account is debited and is credited. 1&(.$n process costing, factory overhead incurred does not usually equal that applied, "hich yields either or overhead. 1&).+ process cost summary involves computations and analysis at four sequential steps. These are >1? >2? , , >3? , , and >? > ? . . 1'0.-n 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 ?. 1'1.hen the final production department completes goods, the cost of the completed goods are transferred to . . 1'2.hen the completed goods are sold, the cost of the completed goods are transferred to . .
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