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Test Bank Chapter 20 Process Cost Systems

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Test Bank Chapter 20 Process Cost Systems

Chapter 20--Process Cost Systems

Student: ___________________________________________________________________________

1. Process cost systems use job order cost cards to accumulate cost data. 
 

 

2. Both process and job order cost systems maintain perpetual inventory accounts with subsidiary ledgers. 
 

 

3. If the principal products of a manufacturing process are identical, a process cost system is more appropriate than a job order cost system. 
 

 

4. If the products of a manufacturing process are produced to customer specifications, a process cost system is more appropriate than a job order cost system. 
 

 

5. Process manufacturers typically use large machines to process a continuous flow of raw materials into a finished state. 
 

 

6. Industries that typically use process cost systems include chemicals, oil, metals, food, paper, and pharmaceuticals. 
 

 

7. In a process cost system, product costs are accumulated by processing department rather than by job. 
 

 

8. Conversion costs include materials, direct labor, and factory overhead. 
 

 

9. The direct materials costs and direct labor costs incurred by a production department are referred to as conversion costs. 
 

 

10. The direct labor costs and factory overhead costs incurred by a production department are referred to as conversion costs. 
 

 

11. The first step in determining the cost of goods completed and ending inventory valuation using process costing is to calculate equivalent units of production. 
 

 

12. Conversion costs are usually incurred evenly throughout a process. 
 

 

13. Equivalent units of production are the number of units that could have been manufactured from start to finish during an accounting period. 
 

 

14. Both job order and process cost accounting use equivalent units of production to determine costs. 
 

 

15. If 30,000 units of materials enter production during the first year of operations, 25,000 of the units are finished, and 5,000 are 50% completed, the number of equivalent units of production would be 28,500. 
 

 

16. If 16,000 units of materials enter production during the first year of operations, 12,000 of the units are finished, and 4,000 are 75% completed, the number of equivalent units of production would be 15,000. 
 

 

17. If the costs for direct materials, direct labor, and factory overhead were $277,300, $52,600, and $61,000, respectively, for 14,000 equivalent units of production, the total conversion cost was $390,900. 
 

 

18. If the costs for direct materials, direct labor, and factory overhead were $60,000, $35,000, and $25,000, respectively, for 20,000 equivalent units of production, the conversion cost per equivalent unit was $6. 
 

 

19. If the costs for direct materials, direct labor, and factory overhead were $522,200, $82,700, and $45,300, respectively, for 16,000 equivalent units of production, the conversion cost per equivalent unit was $8.00. 
 

 

20. If 10,000 units which were 50% completed are in process at November 1, 90,000 units were completed during November, and 20,000 were 20% completed at November 30, the number of equivalent units of production for November was 90,000. (Assume no loss of units in production and that inventories are costed by the first-in, first-out method.) 
 

 

21. If 10,000 units which were 40% completed are in process at November 1, 80,000 units were completed during November, and 12,000 were 20% completed at November 30, the number of equivalent units of production for November was 75,600. (Assume no loss of units in production and that inventories are costed by the first-in, first-out method.) 
 

 

22. In applying the first-in, first-out method of costing inventories, if 8,000 units which are 30% completed are in process at June 1, 28,000 units are completed during June, and 4,000 units were 75% completed at June 30, the number of equivalent units of production for June was 33,400. 
 

 

23. In applying the first-in, first-out method of costing inventories, if 8,000 units which are 30% completed are in process at June 1, 28,000 units are completed during June, and 4,000 units were 80% completed at June 30, the number of equivalent units of production for June was 28,600. 
 

 

24. The cost of production report reports the cost of the goods sold. 
 

 

25. The cost of production report reports the cost charged to production and the costs allocated to finished goods and work in process. 
 

 

26. The cost of production report summarizes (1) the units for which the department is accountable and the units to be assigned costs and (2) the costs charged to the department and the allocation of those costs. 
 

 

27. The amount journalized showing the cost added to finished goods is taken from the cost of production report. 
 

 

28. One of the differences in accounting for a process costing system compared to a job order system is that the amounts used to transfer goods from one department to the next comes from the cost of production report instead of job cost cards. 
 

 

29. One of the primary uses of a cost of production report is to assist management in controlling production costs. 
 

 

30. Yield measures the ratio of the materials output quantity to the materials input quantity. 
 

 

31. Companies recognizing the need to simultaneously produce products with high quality, low cost, and instant availability have adopted a just-in-time processing philosophy. 
 

 

32. In a just-in-time system, processing functions are combined into work centers, sometimes called departments. 
 

 

33. The FIFO method of process costing is simpler than the Average cost method. 
 

 

34. Companies that use the average costing method for process costing have unit costs that include costs from more that one accounting period. 
 

 

35. If a company uses average costing instead of FIFO they will still get the same unit costs. 
 

 

36. The closer a company moves towards Just in Time production, the differences in unit costs between average costing and FIFO will be reduced. 
 

 

37. Custom-made goods would be accounted for using a process costing system. 
 

 

38. In a process costing system, a separate work in process inventory account is maintained for each customer’s job. 
 

 

39. Direct materials, direct labor, and factory overhead are assigned to each manufacturing process in a process costing system. 
 

 

40. In a process costing system, costs flow into finished goods inventory only from the work in process inventory of the last manufacturing process. 
 

 

41. Equivalent units are the sum of direct materials used and direct labor incurred. 
 

 

42. Conversion costs are generally added evenly throughout the process. 
 

 

43. Equivalent units should be computed separately for direct materials and conversion costs. 
 

 

44. Costs are transferred, along with the units, from one work in process inventory account to the next in a process costing system. 
 

 

45. In a process costing system, each process will have a work in process inventory account. 
 

 

46. In a process costing system, the cost per equivalent unit is computed before computing equivalent units. 
 

 

47. Costs of ending work in process inventory are included in the cost per equivalent unit computation. 
 

 

48. Conversion and direct materials are generally both added at the end of the production process. 
 

 

49. Gilbert Corporation had 25,000 finished units and 8,000 units were 35% complete.  The equivalent units totaled 30,200. 
 

 

50. The entry to transfer goods in process from Department X to Department Y includes a debit to Work in Process-Department X. 
 

 

51. Process manufacturing usually reflects a manufacturer that produces small quantities of unique items. 
 

 

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

 

53. The last step in the accounting procedure for process costing is the calculation of equivalent units of production. 
 

 

54. The FIFO method separates work done on beginning inventory in the previous period from work done on it in the current period. 
 

 

55. When a process cost accounting system records the purchase of materials, the Materials account is credited. 
 

 

56. In a process costing system, indirect materials are charged to Work in Process. 
 

 

57. A process cost accounting system records all actual factory overhead costs directly in the Work in Process account. 
 

 

58. Once equivalent units are calculated for materials, this number will also be used for direct labor and factory overhead. 
 

 

59. If a department that applies FIFO process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to conversion, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units to direct labor to complete them. 
 

 

60. All costs of the processes in a process costing system ultimately pass through the Cost of Goods Sold account. 
 

 

61. For which of the following businesses would a process cost system be appropriate? 
A. Auto repair service
B. Paint manufacturer
C. Specialty printer
D. Custom furniture manufacturer

 

62. Which of the following is NOT a way in which process and job order cost systems are similar? 
A. Both accumulate product costs--direct materials, direct labor, and factory overhead
B. Both allocate product cost to units produced
C. Both maintain perpetual inventories
D. Both use job order cost cards

 

63. The cost system best suited to industries that manufacture a large number of identical units of commodities on a continuous basis is: 
A. process
B. departmental
C. first-in, first-out
D. job order

 

64. In a process cost system, the amount of work in process inventory is valued by: 
A. finding the sum of all open job costs
B. allocating departmental costs between completed and partially completed units
C. multiplying units in ending inventory by the direct materials cost per unit
D. all of the above

 

65. In process cost accounting, the costs of direct materials and direct labor are charged directly to: 
A. service departments
B. processing departments
C. customer accounts receivable
D. job orders

 

66. The two categories of cost comprising conversion costs are: 
A. direct labor and indirect labor
B. direct labor and factory overhead
C. factory overhead and direct materials
D. direct labor and direct materials

 

67. In a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following entries? 
A. Debit Work in Process--Dept. B; credit Work in Process--Dept. A.
B. Debit Work in Process--Dept. B; credit Finished Goods--Dept. A.
C. Debit Work in Process--Dept. B; credit Cost of Goods Sold--Dept. A.
D. Debit Finished Goods; credit Work in Process--Dept. B.

 

68. The three categories of manufacturing costs comprising the cost of work in process are direct labor, direct materials, and: 
A. office expenses
B. direct expenses
C. sales salaries expense
D. factory overhead

 

69. For which of the following businesses would a process cost system be appropriate? 
A. An oil refinery
B. Yacht builder
C. Specialty furniture company
D. Custom electronics manufacturer

 

70. Which of the following is not characteristic of a process cost system? 
A. The system may use several work in process inventory accounts.
B. Manufacturing costs are grouped by department rather than by jobs.
C. The system accumulates costs per job.
D. The system emphasizes time periods rather than the time it takes to complete a job.

 

71. Which of the following entities would probably use a process costing system? 
A. A custom boat builder
B. A custom furniture manufacturer
C. A one of a kind jewelry creator
D. An oil refinery.

 

72. Which of the following is not a characteristic of a process cost system? 
A. Manufacturing costs are grouped by departments.
B. The system may use several Work-in-Process accounts.
C. The system measures costs for each completed job.
D. The system allocates costs between completed and partially completed units within a department.

 

73. If a company uses a process costing system to account for the costs in its four production departments, how many Work-in-Process will it use? 
A. 3
B. 4
C. 1
D. 2

 

74. The four steps necessary to determine the cost of goods completed and the ending inventory valuation in a process cost system are:
 

1.

allocate costs to transferred and partially completed units

2.

determine the units to be assigned costs

3.

determine the cost per equivalent unit

4.

calculate equivalent units of production

 

 


The correct ordering of the steps is: 
A. 2, 4, 3, 1
B. 4, 2, 3, 1
C. 2, 3, 4, 1
D. 2, 3, 1, 4

 

75. Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs? 
A. Advertising costs
B. Raw lumber (direct materials)
C. Machine operator's wages (direct labor)
D. Sales salaries

 

76. Which of the following costs incurred by a paper manufacturer would NOT be included in the group of costs referred to as conversion costs? 
A. Factory supervisor's salary
B. Machine operator's wages (direct labor)
C. Raw lumber (direct materials)
D. Factory maintenance personnel supplies

 

77. In the manufacture of 15,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,500. What is the total conversion cost? 
A. $270,000
B. $158,500
C. $323,500
D. $53,500

 

78. If Department H had 600 units, 60% completed, in process at the beginning of the period, 6,000 units were completed during the period, and 700 units were 30% completed at the end of the period, what was the number of equivalent units of production for conversion costs for the period, if the first-in, first-out method is used to cost inventories? 
A. 7,300
B. 5,640
C. 6,700
D. 5,850

 

79. If Department K had 2,000 units, 40% completed, in process at the beginning of the period, 12,000 units were completed during the period, and 1,200 units were 25% completed at the end of the period, what was the number of equivalent units of production for conversion costs for the period if the first-in, first-out method is used to cost inventories? 
A. 11,500
B. 11,200
C. 15,200
D. 10,000

 

80. Department G had 3,600 units, 25% completed at the beginning of the period, 11,000 units were completed during the period, 3,000 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period:
 

Work in process, beginning of period

$40,000

Costs added during period:

 

  Direct materials (10,400 at $8)

83,200

  Direct labor

63,000

  Factory overhead

25,000

 

 



 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the total cost of the departmental work in process inventory at the end of the period (round unit cost calculations to four decimal places)? 
A. $16,163
B. $21,432
C. $35,670
D. $28,935

 

81. Department G had 3,600 units, 25% completed at the beginning of the period, 11,000 units were completed during the period, 3,000 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period:
 

Work in process, beginning of period

$40,000

Costs added during period:

 

  Direct materials (10,400 at $8)

83,200

  Direct labor

63,000

  Factory overhead

25,000

 

 



 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the total cost of 3,600 units of beginning inventory which were completed during the period (round unit cost calculations to four decimal places)? 
A. $62,206
B. $16,163
C. $40,000
D. $19,275

 

82. Department G had 3,600 units, 25% completed at the beginning of the period, 11,000 units were completed during the period, 3,000 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period:
 

Work in process, beginning of period

$40,000

Costs added during period:

 

  Direct materials (10,400 at $8)

83,200

  Direct labor

63,000

  Factory overhead

25,000

 

 



 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the total cost of the units "started and completed" during the period (round unit cost calculations to four decimal places)? 
A. $211,200
B. $120,060
C. $190,275
D. $20,934

 

83. Department R had 5,000 units in work in process that were 75% completed as to labor and overhead at the beginning of the period, 30,000 units of direct materials were added during the period, 32,000 units were completed during the period, and 3,000 units were 40% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was: 
A. 32,450
B. 29,450
C. 31,950
D. 26,000

 

84. Department S had no work in process at the beginning of the period. 12,000 units of direct materials were added during the period at a cost of $84,000, 9,000 units were completed during the period, and 3,000 units were 30% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $49,500 and factory overhead was $9,900.

 The total conversion costs for the period were: 
A. $59,400
B. $49,500
C. $143,400
D. $9,900

 

85. Department S had no work in process at the beginning of the period. 12,000 units of direct materials were added during the period at a cost of $84,000, 9,000 units were completed during the period, and 3,000 units were 30% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $49,500 and factory overhead was $9,900.

 The total cost of units completed during the period were: 
A. $117,000
B. $143,400
C. $121,000
D. $127,450

 

86. The following production data were taken from the records of the Finishing Department for June:
 

Inventory in process, 6-1,

 

  25% completed

1,500 units

Transferred to finished goods

 

  during June

5,000 units

Equivalent units of production

 

  during June

5,200 units

 

 


Determine the number of equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories.  Assume the completion percentage of 25% applies to both direct materials and conversion costs. 
A. 575 units
B. 200 units
C. 1,000 units
D. 300 units

 

87. The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows:
 

April 1, work in process:

 

  Materials cost, 3,000 units

$  8,000

  Conversion costs, 3,000 units,

 

    66.7% completed

6,000

Materials added during April, 10,000 units

30,000

Conversion costs during April

31,000

Goods finished during April, 11,500 units

---

April 30 work in process, 1,500 units,

 

  50% completed

---

 

 


All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for April is: 
A. $3.00
B. $3.80
C. $2.92
D. $2.31

 

88. Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was: 
A. 15,650
B. 14,850
C. 14,150
D. 14,650

 

89. Department A had 1,000 units in Work in Process that were 60% completed at the beginning of the period at a cost of $7,000. 4,000 units of direct materials were added during the period at a cost of $8,200. 4,500 units were completed during the period, and 500 units were 40% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $28,700 and factory overhead was $4,510. The cost of the 500 units in process at the end of the period if the first-in, first-out method is used to cost inventories was: 
A. $3,240
B. $5,175
C. $2,569
D. $2,645

 

90. In the manufacture of 10,000 units of a product, direct materials cost incurred was $145,800, direct labor cost incurred was $82,000, and applied factory overhead was $45,500. What is the total conversion cost? 
A. $127,500
B. $145,800
C. $272,200
D. $273,300

 

91. If Department H had 600 units, 60% completed, in process at the beginning of the period, 8,000 units were completed during the period, and 500 units were 30% completed at the end of the period, what was the number of equivalent units of production for the period for conversion  if the first-in, first-out method is used to cost inventories? Assume the completion percentage applies to both direct materials and conversion cost. 
A. 7,790
B. 8,390
C. 8,600
D. 8,000

 

92. If Department K had 2,500 units, 45% completed, in process at the beginning of the period, 15,000 units were completed during the period, and 1,200 units were 40% completed at the end of the period, what was the number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories? Assume the completion percentage applies to both direct materials and conversion cost. 
A. 16,855
B. 16,605
C. 13,460
D. 14,355

 

93. Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.

 The number of equivalent units of production for conversion costs for the period was: 
A. 30,200
B. 29,800
C. 33,800
D. 33,000

 

94. Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.

 The number of equivalent units of production for material costs for the period was: 
A. 33,000
B. 29,800
C. 29,000
D. 32,000

 

95. The following production data were taken from the records of the Finishing Department for June:
 

 Inventory in process, 6-1 ( 30% completed)

4,000 units

Completed units during June

65,000 units

Ending inventory (60% complete)

7,000 units

 

 



 Determine the number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories. 
A. 68,000 units
B. 70,400 units
C. 66,200 units
D. 4,200 units

 

96. The following production data were taken from the records of the Finishing Department for June:
 

 Inventory in process, 6-1 ( 30% completed)

4,000 units

Completed units during June

65,000 units

Ending inventory (60% complete)

7,000 units

 

 



 Determine the number of material equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories and materials were added at the beginning of the process. 
A. 7,000 units
B. 68,000 units
C. 72,000 units
D. 76,000 units

 

97. The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows:
 

April 1, work in process:

 

  Materials cost, 3,000 units

$  7,200

  Conversion costs, 3,000 units,

 

   60% completed

6,000

Materials added during April, 10,000 units

25,000

Conversion costs during April

35,750

Goods finished during April, 12,000 units

---

April 30 work in process, 1,000 units,

 

  40% completed

---

 

 


All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for April is: 
A. $2.48
B. $2.08
C. $2.50
D. $5.25

 

98. The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows:
 

April 1, work in process:

 

  Materials cost, 3,000 units

$  7,200

  Conversion costs, 3,000 units,

 

   40% completed

6,000

Materials added during April, 10,000 units

25,000

Conversion costs during April

30,800

Goods finished during April, 12,000 units

---

April 30 work in process, 1,000 units,

 

  40% completed

---

 

 


All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The conversion cost per equivalent unit for April is: 
A. $2.48
B. $2.75
C. $2.50
D. $5.25

 

99. Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710.

 The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was: 
A. 14,365
B. 13,615
C. 12,000
D. 15,865

 

100. Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710.

 The number of equivalent units of production for the period for materials if the first-in, first-out method is used to cost inventories was: 
A. 16,700
B. 12,000
C. 1,700
D. 13,700

 

101. The following unit data were assembled for the assembly process of the Super Co. for the month of June. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO process.
 

 

 

Units

 

Beginning work in process

 

5,000

 

 

(60% complete)

 

 

Units started in September

 

48,000

 

Ending work in process

 

4,000

 

 

(30% complete)

 

 

 

 

 

 



 The number of equivalent units produced with respect to conversion costs is: 
A. 50,200
B. 48,000
C. 53,000
D. 47,200

 

102. The following unit data were assembled for the assembly process of the Super Co. for the month of June. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO process.
 

 

 

Units

 

Beginning work in process

 

5,000

 

 

(60% complete)

 

 

Units started in September

 

48,000

 

Ending work in process

 

4,000

 

 

(30% complete)

 

 

 

 

 

 



 The number of equivalent units produced with respect to direct materials costs is: 
A. 48,000
B. 49,000
C. 43,000
D. 53,000

 

103. Carmelita Inc., has the following information available:
 

 

Costs from

Costs from

 

Beginning Inventory

Current Period

 

 

 

Direct materials

$2,500

$22,252

Conversion Costs

  6,200

 150,536

 

 

 



 At the beginning of the period, there were 500 units in process that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs. During the period 4,500 units were started and completed. Ending inventory contained 340 units that were 30 percent complete as to conversion costs and 100 percent complete as to materials costs. (Assume that the company uses the FIFO process cost method.)

The equivalent units of production for direct materials and conversion costs, respectively, were 
A. 5,340 for direct materials and 4,902 for conversion costs.
B. 4,840 for direct materials and 4,802 for conversion costs.
C. 4,602 for direct materials and 4,802 for conversion costs.
D. 4,902 for direct materials and 4,802 for conversion costs.

 

104. Carmelita Inc., has the following information available:
 

 

Costs from

Costs from

 

Beginning Inventory

Current Period

 

 

 

Direct materials

$2,500

$22,252

Conversion Costs

  6,200

 150,536

 

 

 



 At the beginning of the period, there were 500 units in process that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs. During the period 4,500 units were started and completed. Ending inventory contained 340 units that were 30 percent complete as to conversion costs and 100 percent complete as to materials costs. (Assume that the company uses the FIFO process cost method.)

The cost of completing a unit during the current period was 
A. $36.19
B. $34.88
C. $35.95
D. $35.89

 

105. Carmelita Inc., has the following information available:
 

 

Costs from

Costs from

 

Beginning Inventory

Current Period

 

 

 

Direct materials

$2,500

$22,252

Conversion Costs

  6,200

 150,536

 

 

 



 At the beginning of the period, there were 500 units in process that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs. During the period 4,500 units were started and completed. Ending inventory contained 340 units that were 30 percent complete as to conversion costs and 100 percent complete as to materials costs. (Assume that the company uses the FIFO process cost method.  Round cost per unit figures to two cents, i.e. $2.22 when calculating total costs.)

The total costs that will be transferred into Finished Goods for units started and completed were 
A. $161,775
B. $156,960
C. $162,855
D. $161,505

 

106. Equivalent production units, usually are determined for 
A. direct materials and conversion costs.
B. direct materials only.
C. conversion costs only.
D. direct materials and direct labor costs only.

 

107. The portion of whole units that were completed with respect to either materials or conversion costs within a given accounting period is the definition of  
A. units started and completed.
B. equivalent units.
C. conversion costs.
D. ending work in process.

 

108. Which of the following is not included in conversion costs? 
A. Direct labor.
B. Factory overhead.
C. Indirect labor.
D. Direct materials.

 

109. A form prepared periodically for each processing department summarizing (1) the units for which the department is accountable and the units to be assigned costs and (2) the costs charged to the department and the allocation of these costs is termed a: 
A. factory overhead production report
B. manufacturing cost report
C. process cost report
D. cost of production report

 

110. Department W had 2,400 units, one-third completed at the beginning of the period, 16,000 units were transferred to Department X from Department W during the period, and 1,800 units were one-half completed at the end of the period.  Assume the completion ratios apply to direct materials and conversion costs.

 What are the total gross number of units to be assigned cost on the cost of production report for Department W? 
A. 12,000 units
B. 13,600 units
C. 18,500 units
D. 17,800 units

 

111. Department W had 2,400 units, one-third completed at the beginning of the period, 16,000 units were transferred to Department X from Department W during the period, and 1,800 units were one-half completed at the end of the period.  Assume the completion ratios apply to direct materials and conversion costs.

 What is the equivalent units of production used to compute unit conversion cost on the cost of production report for Department W (Assuming the company uses FIFO)? 
A. 16,100 units
B. 13,600 units
C. 15,000 units
D. 18,500 units

 

112. Department J had no work in process at the beginning of the period, 18,000 units were completed during the period, 2,000 units were 30% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (Assuming the company uses FIFO and rounds average cost per unit to two decimal places):
 

Direct materials (20,000 at $5)

$  100,000

Direct labor

142,300

Factory overhead

57,200

 

 



 Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the departmental work in process inventory at the end of the period? 
A. $90,000
B. $283,140
C. $199,500
D. $16,438

 

113. Department J had no work in process at the beginning of the period, 18,000 units were completed during the period, 2,000 units were 30% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (Assuming the company uses FIFO and rounds average cost per unit to two decimal places):
 

Direct materials (20,000 at $5)

$  100,000

Direct labor

142,300

Factory overhead

57,200

 

 



 Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the 18,000 units completed during the period? 
A. $90,000
B. $193,140
C. $16,438
D. $283,140

 

114. Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.

 The journal entry to record the flow of costs into Department 1 during the period for direct materials is: 
A. Work in Process--Department 1               100,000
  Materials                                                                           100,000
B. Work in Process--Department 1                 55,000
  Materials                                                                             55,000
C. Materials                                                  100,000
  Work in Process--Department 1                                        100,000
D. Materials                                                    55,000
  Work in Process--Department 1                                          55,000

 

115. Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.

 The journal entry to record the flow of costs into Department 2 during the period for direct materials is: 
A. Work in Process--Department 2               100,000
  Materials                                                                           100,000
B. Work in Process--Department 2                 55,000
  Materials                                                                             55,000
C. Work in Process--Department 2               150,000
  Materials                                                                           150,000
D. Materials                                    &

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