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Exam 20: Process Cost Accounting

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Question 21

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In a process operation,all labor that is used exclusively by a single production department is considered to be direct labor.

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Question 22

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A company's beginning Work in Process inventory consisted of 20,000 units that were 20% complete with respect to direct labor.These beginning units were completed and another 90,000 units were started during the current period.Of those started,60,000 were finished and the remaining 30,000 were 40% complete at the end of the period.Using the weighted-average method,the equivalent units of production with regard to direct labor were:

A) 60,000.
B) 74,000.
C) 76,000.
D) 92,000.
E) 96,000.

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Question 23

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The process cost summary is an important managerial accounting report produced by a process costing system.

The following refers to units processed by a breakfast cereal maker in August.Compute the total equivalent units of production with respect to conversion for July using the weighted-average inventory method.

Which of the following is not one of the four steps in accounting for production activity and assigning costs during a period under a process cost system?

In a process costing system,direct materials used are debited to the __________ account,and indirect materials used are debited to the ____________ account. Answers must appear in this order.

Hybrid costing systems can only be applied to auto manufacturing.

A production department's output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 10,000 units in ending Work in Process inventory.The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs.There were 1,000 units in beginning Work in Process inventory,and they were 70% complete with respect to both direct materials and conversion costs.Calculate the equivalent units of production for the month,assuming the company uses the weighted average method.

To compute equivalent units of production,one must be able to reasonably estimate:

A key idea in process costing that refers to the number of units that could have been started and completed given the costs incurred during the period is known as:

In the same time period,it is possible that a production department can produce 1,000 equivalent finished units with respect to direct materials and 1,200 equivalent finished units with respect to direct labor.

In a process costing system,companies typically end each period with only Finished Goods Inventory.

Materials and labor costs that are clearly associated with a specific process or department are known as ___________________.Those costs that are not clearly associated with a specific process or department are called ________________. Answers must appear in this order.

A company's January 1 Work in Process inventory contained 30,000 units that were 25% complete with respect to direct labor.The beginning inventory was completed this year and another 120,000 units were started.Of those started,80,000 were finished and the remaining 40,000 were left 20% complete.Calculate the equivalent units of production for the year using the weighted average method.

Conversion cost per equivalent unit is the combined costs of direct materials and factory overhead.

On a process cost summary,the total costs to account for (the processing costs for the period plus the Work in Process at the end of the period)should equal ___________________ (____________________ plus _____________________). The first answer must appear where it is shown;the second and third answers can be flip-flopped.

Pitt Enterprises manufactures jeans.All materials are introduced at the beginning of the manufacturing process in the Cutting Department.Conversion costs are incurred uniformly throughout the manufacturing process.As the cutting of material is completed,the pieces are immediately transferred to the Sewing Department.Information for the Cutting Department for the month of May follows. Work in Process,May 1 (50,000 units,100% complete for direct materials,40% complete with respect to conversion costs;includes $70,500 of direct material cost;$34,050 of conversion costs) . Work in Process,May 31 (75,000 units,100% complete for direct materials;20% complete for conversion costs) . If Pitt Enterprises uses the FIFO method of process costing,compute the cost per equivalent unit for direct materials and conversion costs respectively for May.

Conversion cost per equivalent unit is the combined cost of direct labor and factory overhead per equivalent unit.

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

Prepare journal entries to record the following production activities for Oaks Manufacturing. a.Incurred overhead costs of $79,000 (paid in cash). b.Applied overhead at 110% of direct labor costs which are $93,900. c.Transferred completed products with a cost of $258,200 to finished goods inventory. d.Sold $602,000 of product on credit.Cost is $271,000.