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Exam 20: Process Costing

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Question 21

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The four-steps of tracking product costs in a process costing system are ________.

A) verify, analyze, record, and adjust
B) assign, analyze, approximate, and allocate
C) accumulate, assign, allocate, and adjust
D) arrive, analyze, assume, and allocate

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Question 22

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Which of the following is a step in the preparation of a production cost report?

A) assignment of costs to units completed and units in process
B) summarization of the flow of physical units to the suppliers
C) computation of expected units of production
D) computation of amount of materials required for production

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Question 23

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Four steps are necessary in preparing a production cost report: 1.Compute output in terms of equivalent units of production 2) Assign costs to units completed and units in process 3) Summarize the flow of physical units 4) Compute the cost per equivalent unit of production Place these steps in the correct order.

The production cost report for Department 1 shows that $154,000 was assigned to the 36,000 units transferred to Department 2.This transfer cost assigned to units transferred to Department 2 is recorded with a debit to Work-in-Process-Department 2.Process costing is used.

Equivalent units of production are calculated because

Paraquat Manufacturing produces a chemical herbicide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had a zero beginning balance.During January,42,000 gallons of chemicals were started into production.During the month,34,000 gallons were completed,and 8000 remained in process,partially completed.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly throughout the process. During January,the Mixing Department incurred $63,000 in direct materials costs and $240,000 in conversion costs.At the end of the month,the ending inventory in the Mixing Department was 60% complete with respect to conversion costs.First,calculate the equivalent units,then calculate the cost per equivalent unit,and then calculate the total cost of the product that was completed and transferred out during January.The weighted-average method is used. The total cost of product transferred out was ________.(Round any intermediate calculations two decimal places,and your final answer to the nearest dollar.)

Quince,Inc.uses a process costing system.It prepares a production cost report for each processing department.How will the managers of Quince use these production cost reports to prepare the balance sheet at the end of an accounting period?

In a process costing system,a department's total production costs incurred in a particular period must equal the total costs transferred out of the department.

Under process costing,the ________ account is credited to adjust for underallocated overhead costs.The perpetual inventory system is used.

Under process costing,depreciation on plant machinery is debited to the respective department's Work-in-Process Inventory.

The Assembly Department of ByteSize,Inc.,manufacturer of computers,incurred $280,000 in direct material costs and $70,000 in conversion costs.The equivalent units of production for direct materials and conversion costs are 1500 and 600,respectively.The weighted-average method is used.The cost per equivalent unit of production (EUP) for conversion costs is ________.(Round your answer to the nearest cent.)

On September 30,the Sorting Department of Java Works had ending Work-in-Process Inventory of 30,000 units that was 46% complete for materials and 36% complete for conversion costs.The company uses the FIFO method.This means that for the beginning Work-in-Process Inventory,________% of the materials and ________% of conversion costs were added during October.

Which of the following statements is TRUE of process costing?

List the four steps,in the order of occurrence,that are used in preparing a production cost report.

In a process costing system,each process or department has its own Work-in-Process Inventory account.

Briton Inc.has two processes-Coloring Department and Mixing Department.Briton sold 350 gallons on account at $110 per gallon.The total cost of processing was $385,000 for 5,500 gallons of paint.Throughout the year,the company used a predetermined overhead allocation rate to allocate $75,000 and $65,000 of indirect costs to the Coloring Department and Mixing Department,respectively.The actual overhead cost incurred amounted to $150,000 at the end of the year.Record the necessary journal entries for the sale of goods and for adjustment of over- or underallocated manufacturing overhead at the end of the year.Briton uses the perpetual inventory system and process costing.

When calculating the cost per equivalent unit in process costing,what is the difference between the weighted-average and FIFO methods?

Magoro,Inc.has two processes-Coloring Department and Mixing Department.The company sold 450 gallons on account at $110 per gallon.The total cost of processing was $385,000 for 5,500 gallons of paint.Throughout the year,the company used a predetermined overhead allocation rate to allocate $80,000 and $90,000 of indirect costs to the Coloring Department and Mixing Department,respectively.The actual overhead costs incurred amounted to $150,000 at the end of the year.What are the journal entries to record the sale of goods and the adjustment for over/underallocated manufacturing overhead at the end of the year if the company follows a perpetual inventory system and process costing?

A production cost report cannot be used for the pricing of products because it depicts only the ways to control product costs.

In process costing,production costs are accumulated by process.At the end of the period,the total production costs incurred must be split into two components.What are these two components?