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Exam 12: Job-Order, Process, and Hybrid Costing Systems

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Question 31

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Which source document provides information for the journal entry to transfer costs from the Work in Process Inventory account to the Finished Goods Inventory account?

A) Job cost sheet
B) Work ticket
C) Standard cost card
D) Materials requisition

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Question 32

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Indicate whether each of the following statements is true or false.Applying overhead costs to a job is an asset exchange transaction.The cost of finished goods in a job-order system includes the costs of direct materials, direct labor, and manufacturing overhead.When goods are completed, an entry is made to decrease the balance finished goods inventory.When a job is completed and transferred to finished goods, the job cost sheet accompanies the job.The payment of wages to production employees is recorded on the statement of cash flows as a cash flow for investing activities if the goods have not yet been sold.

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Applying overhead costs to a job is an a...

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Question 33

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An indirect material:

O'Hare Company, is a manufacturing firm that uses a job-order cost system to determine the costs of its products. During the current accounting period, O'Hare transferred total product costs for job #132, to finished goods. The recognition of this event would:

An example of a product or service that would most likely be accounted for using a process cost system would be:

O'Hare Company, is a manufacturing firm that uses a job-order cost system to determine the costs of its products. During the current accounting period, O'Hare recognized depreciation of $600 on manufacturing equipment. Which of the following describes the effect of this event on the accounting equation?

Describe how accumulation of costs in a job-order cost system parallels the manufacturing process.

Select the incorrect statement regarding the cost of production report.

Bacon Manufacturing Company has two departments, Assembly and Finishing. Consider the following data for the Finishing Department for April: Required: 1) Compute the equivalent whole units for the Finishing Department.2) Compute the number of equivalent whole units for the department's ending inventory.3) At what state of completion (percentage) are the units in the department's ending inventory? (State your answer in a percentage and round it to one decimal place.)4) Compute the amount of cost that should be transferred out.5) Compute the cost that should be assigned to the department's ending inventory.

Oregon Company started the month of August with 4,000 units in beginning work in process; these units were 60 percent complete on August 1. During the month, 16,000 units were completed and transferred to Finished Goods. The ending work in process was 2,000 units that were 20% complete.Required: Calculate Oregon's equivalent whole units for the month of August.

Select the incorrect statement regarding cost flows through a job-order cost system.

Under job-order costing, the actual direct material, actual direct labor, and estimated overhead costs are recorded on the job cost sheet.

At the time indirect materials are issued to production, the balance in the:

Why is the concept of equivalent units important for process costing?

Bates Manufacturing uses a job order cost system, and overhead is applied on the basis of direct labor hours. At the beginning of the period, the company estimated that overhead would be $64,000 and 10,000 direct labor hours would be worked. Two projects were started and completed in the current accounting period. The following transactions were completed during the period: (a) Used $10,000 of direct material on Project I and $6,800 of direct material on Project II.(b) Labor costs for the two jobs amounted to the following: Project I, $24,000 (2,000 hours) ; Project II, $44,000 (6,000 hours) .(c) Project II was sold during the period for $120,000.The company's gross margin for the period was: (Do not round your intermediate calculation.)

Drummond Company provides customized computer training to employees of large corporations. What kind of costing system should Drummond use?

Why does a company that uses a process cost system need to calculate equivalent whole units?

Indicate whether each of the following statements about process costing systems is true or false.The number of equivalent whole units can be calculated by the FIFO method or by the weighted average method.For Company X, the cost in beginning work in process was $18,000; costs incurred during the month were $52,100; the number of equivalent whole units for the month was 8,400. Company X calculates equivalent whole units by the weighted average method. The cost per equivalent whole unit was $6.20.The allocation of costs between products transferred out and those still in process at the end of the period is shown on a cost of production report.The weighted average method of calculating equivalent whole units takes into account the stage of completion of beginning work in process but not ending work in process.Many companies use the weighted average method to calculate equivalent whole units because the method is relatively easy to use.

A hybrid cost system is one that combines features of both process and job-order inventory systems.

During the current accounting period, O'Hare applied $14,500 of estimated overhead cost to production. Actual overhead costs were $14,325. Assuming that the balance in the Manufacturing Overhead is insignificant, the recognition of the transaction to close that account will: This makes the explanation much easier