Question 1

South Corp. uses a FIFO process costing system in which direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory for January consisted of 1,000 units that were 40% completed. 10,000 units were started into the process during January. On January 31, the inventory consisted of 500 units that were 70% completed. How many units were started and completed during the period?

Accepted Answer

A)   9,500
B)   10,500
C)   11,000
D)   11,500E) B) and D)
F) All of the above

Question 2

The journal entry to record the issuance of direct materials into production includes:

Accepted Answer

A)   a debit to Raw Materials Inventory.
B)   a debit to Finished Goods Inventory.
C)   a debit to Work in Process Inventory.
D)   a debit to Cash.E) A) and B)
F) A) and C)

Question 3

Complete the following chart by reconciling the number of physical units. The months listed are sequential, and for the same department.

Accepted Answer

The answer of Complete the following chart by reconciling the...

Question 4

To determine how much cost should be transferred out of Work in Process Inventory:

Accepted Answer

A)   multiply costs per equivalent unit by the number of equivalent units associated with units completed.
B)   multiply costs per equivalent unit by the number of equivalent units associated with ending inventory.
C)   subtract cost of beginning inventory from current period costs.
D)   add cost of beginning inventory and current period costs.E) A) and D)
F) None of the above A

Question 5

Under process costing, which manufacturing costs are assigned to the product as it moves from one manufacturing process to the next?

Accepted Answer

A)   Direct materials, direct labor, and conversion costs
B)   Direct materials, indirect materials, and manufacturing overhead
C)   Direct materials, direct labor, and manufacturing overhead
D)   Direct materials, direct labor, and indirect laborE) B) and C)
F) None of the above C

Question 6

The journal entry to record the actual (not applied)  overhead costs incurred includes:

Accepted Answer

A)   a debit to Manufacturing Overhead.
B)   a debit to Work in Process Inventory.
C)   a debit to Finished Goods Inventory.
D)   a debit to Cost of Goods SolD.When actual overhead costs are incurred, debit Manufacturing Overhead account. The credit would be to Cash, Payables, Prepaid Assets, or Accumulated Depreciation. (In contrast, when applying manufacturing overhead costs based on a predetermined rate, credit the Manufacturing Overhead account.) E) B) and C)
F) None of the above

Question 7

Under the FIFO method, physical units must be broken down into:

Accepted Answer

A)   units completed and ending units in process
B)   units started and completed and ending units in process
C)   beginning units in process and units started and completed
D)   beginning units in process, units started and completed, and ending units in processE) B) and C)
F) A) and D)

Question 8

Which of the following relationships is correct?

Accepted Answer

A)   Beginning units in inventory + units started = units completed + ending units in inventory
B)   Units started = beginning units in inventory + units completed + ending units in inventory
C)   Units started - beginning units in inventory = units completed + ending units in inventory
D)   Ending units in inventory + beginning units in inventory = units started - units completedE) A) and B)
F) C) and D)

Question 9

Kramer Corp. began the current period with 4,000 units in process that were 100% complete as to materials and 60% complete as to conversion. Costs of $7,500 in direct materials and $4,700 in conversion costs were incurred in manufacturing those units in the previous period. Kramer ended the current period with 20,000 units completed and 5,000 units still in process. Work in process was 100% complete as to materials and 70% complete as to conversion costs. Kramer incurred $67,500 in direct materials costs, $7,000 in direct labor costs, and $40,000 in manufacturing overhead costs during the period.
Required:
Using the weighted average method, compute the following:
a. Equivalent units of production for materials.
b. Equivalent units of production for conversion.
c. Cost per equivalent unit for materials.
d. Cost per equivalent unit for conversion.

Accepted Answer

a. 25,000 = (20,000 × 100%) + ...

Question 10

Under the weighted-average method, the only partially completed units that need to be addressed are the units in beginning inventory

Accepted Answer

A) True 
 B)False

Question 11

Under the FIFO method, the units completed during the period must be allocated between beginning units in process and units started and completed

Accepted Answer

A) True 
 B)False

Question 12

Which of the following accounts will be treated differently by a process costing system as compared to a job order costing system?

Accepted Answer

A)   Raw Materials Inventory
B)   Work in Process Inventory
C)   Finished Goods Inventory
D)   Cost of Goods SoldE) B) and C)
F) A) and D)

Question 13

Conversion costs consist of:

Accepted Answer

A)   all costs of production.
B)   raw materials and direct labor.
C)   direct labor and manufacturing overhead.
D)   raw materials and manufacturing overheaD.Direct labor and manufacturing overhead costs can be lumped together in a single category called conversion cost.E) B) and D)
F) A) and D)

Question 14

For Salcido, Inc., the value of beginning Work in Process Inventory was $100,000, 25% of which was direct materials cost. During the period, Salcido completed work on 42,500 units, only completed 80% of the work on another 10,000 units, and incurred $80,000 in direct materials cost and $177,500 in conversion costs. Salcido adds direct materials at the beginning of their production process, and incurs conversion costs evenly throughout the process.
Required:
Calculate the following using the weighted average method for process costing.
a. Equivalent units for direct materials
b. Equivalent units for conversion costs
c. Cost per equivalent unit for direct materials
d. Cost per equivalent unit for conversion costs
e. Cost assigned to ending Work in Process Inventory
f. Cost assigned to goods completed and transferred out

Accepted Answer

a. 52,500 = (42,500 × 100%) + (10,000 × ...

Question 15

Kramer Corp. began the period with 5,200 units in process that were 100% complete for materials and 60% complete for conversion, and ended the period with 26,000 units completed and 6,500 units still in process. Work in process was 100% complete for materials and 70% complete for conversion costs.
Required:
Using the weighted average method, compute the equivalent units of production for materials and conversion for the period.

Accepted Answer

The answer of Kramer Corp. began the period with 5,200...

Question 16

Which of the following statements is true?

Accepted Answer

A)   A process costing system will have a single Work in Process Inventory account.
B)   A process costing system will have a separate Work in Process Inventory account for each of the major processes.
C)   A job costing system will have a separate Work in Process Inventory account for each of the major processes.
D)   A process costing system will have a separate Raw Materials Inventory account for each of the major processes.E) B) and D)
F) All of the above

Question 17

To reconcile the total cost of Work in Process Inventory, account for:

Accepted Answer

A)   both beginning Work in Process Inventory and any costs that were added during the current period.
B)   only beginning Work in Process Inventory.
C)   only costs that were added during the period.
D)   beginning Work in Process Inventory, any costs that were added during the current period, and completed costs.E) B) and C)
F) A) and C)

Question 18

The manufacturing cost that is transferred from one production process to another (for example, from production to packaging)  is called the:

Accepted Answer

A)   beginning Work in Process Inventory cost.
B)   ending Work in Process Inventory cost.
C)   transferred-in cost.
D)   accumulated cost of goods.E) All of the above
F) B) and D) C

Question 19

An equivalent unit is calculated by:

Accepted Answer

A)   dividing the number of physical units by the percentage of completion.
B)   multiplying the number of physical units by the percentage of completion.
C)   dividing the number of physical units into direct materials and conversion costs.
D)   subtracting the number of physical units in ending Work in Process Inventory from the total number of physical units.E) A) and D)
F) B) and C)

Question 20

Rathburn, Inc. is a service firm that uses process costing. The firm worked on a total of 1,000 cases this month, 800 of which were completed during the period. The remaining cases were 40% complete. The firm incurred $180,000 in direct labor and manufacturing overhead costs during the period, and had $4,800 in direct labor and manufacturing costs in beginning inventory. Using the weighted average method, what was the total cost of cases completed during the period?

Accepted Answer

A)   $16,800
B)   $17,520
C)   $168,000
D)   $175,200E) B) and C)
F) A) and C)

Exam 3: Process Costing

Correct Answer
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The journal entry to record the issuance of direct materials into production includes:

Correct Answer
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Complete the following chart by reconciling the number of physical units. The months listed are sequential, and for the same department.

Correct Answer
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To determine how much cost should be transferred out of Work in Process Inventory:

Correct Answer
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A

Under process costing, which manufacturing costs are assigned to the product as it moves from one manufacturing process to the next?

Correct Answer
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C

The journal entry to record the actual (not applied) overhead costs incurred includes:

Correct Answer
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Under the FIFO method, physical units must be broken down into:

Correct Answer
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Which of the following relationships is correct?

Correct Answer
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Correct Answer
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a. 25,000 = (20,000 × 100%) + ...
View Answer

Under the weighted-average method, the only partially completed units that need to be addressed are the units in beginning inventory

Correct Answer
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Under the FIFO method, the units completed during the period must be allocated between beginning units in process and units started and completed

Correct Answer
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Which of the following accounts will be treated differently by a process costing system as compared to a job order costing system?

Correct Answer
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Conversion costs consist of:

Correct Answer
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Correct Answer
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a. 52,500 = (42,500 × 100%) + (10,000 × ...
View Answer

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Which of the following statements is true?

Correct Answer
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To reconcile the total cost of Work in Process Inventory, account for:

Correct Answer
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The manufacturing cost that is transferred from one production process to another (for example, from production to packaging) is called the:

Correct Answer
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C

An equivalent unit is calculated by:

Correct Answer
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Correct Answer
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Exam 3: Process Costing

Correct AnswerverifiedShow Answer

The journal entry to record the issuance of direct materials into production includes:

Correct AnswerverifiedShow Answer

Complete the following chart by reconciling the number of physical units. The months listed are sequential, and for the same department.

Correct AnswerverifiedShow Answer

To determine how much cost should be transferred out of Work in Process Inventory:

Correct AnswerverifiedA

Under process costing, which manufacturing costs are assigned to the product as it moves from one manufacturing process to the next?

Correct AnswerverifiedC

The journal entry to record the actual (not applied) overhead costs incurred includes:

Correct AnswerverifiedShow Answer

Under the FIFO method, physical units must be broken down into:

Correct AnswerverifiedShow Answer

Which of the following relationships is correct?

Correct AnswerverifiedShow Answer

Correct Answerverifieda. 25,000 = (20,000 × 100%) + ...View AnswerShow Answer

Under the weighted-average method, the only partially completed units that need to be addressed are the units in beginning inventory

Correct AnswerverifiedShow Answer

Under the FIFO method, the units completed during the period must be allocated between beginning units in process and units started and completed

Correct AnswerverifiedShow Answer

Which of the following accounts will be treated differently by a process costing system as compared to a job order costing system?

Correct AnswerverifiedShow Answer

Conversion costs consist of:

Correct AnswerverifiedShow Answer

Correct Answerverifieda. 52,500 = (42,500 × 100%) + (10,000 × ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

To reconcile the total cost of Work in Process Inventory, account for:

Correct AnswerverifiedShow Answer

The manufacturing cost that is transferred from one production process to another (for example, from production to packaging) is called the:

Correct AnswerverifiedC

An equivalent unit is calculated by:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

Correct Answer
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C

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Correct Answer
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Correct Answer
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a. 25,000 = (20,000 × 100%) + ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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a. 52,500 = (42,500 × 100%) + (10,000 × ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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C

Correct Answer
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Correct Answer
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