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Exam 17: Process Cost Systems

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Question 21

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

A) True
B) False

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Question 22

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

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B) False

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Question 23

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Match each business that follows with the job cost system (a or b) it would most likely utilize. -Tax consultant A)Job order cost system B)Process cost system

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

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 materials if the weighted average method is used to cost inventories was

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

Carmelita Inc. has the following information available: ​ -At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method.​ The equivalent units of production for direct materials and conversion costs, respectively, were

A firm produces its products by a continuous process involving three production departments, 1 through 3. Journalize the entries to record the following selected transactions related to production during August:

Carmelita Inc. has the following information available: ​ -Which of the following is not included in conversion costs?

Department M had 2,000 units 40% completed in process at the beginning of June, 12,000 units completed during June, and 1,200 units 25% completed at the end of June. The number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories is

Department A had 5,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 34,000 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

Match each business that follows to the type of costing system (a or b) it would typically use. -Home construction A)Job order costing B)Process costing

Department J had no work in process at the beginning of the period, 18,000 units were completed during the period, and 2,000 units were 30% completed at the end of the period. The following manufacturing costs were debited to the departmental work in process account during the period. Assume the company uses FIFO and rounds 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, the total cost of the 18,000 units completed during the period is

In the manufacture of 8,000 units of a product, direct materials cost incurred was $154,600, direct labor cost incurred was $84,000, and applied factory overhead was $45,500. The total conversion cost is

In a process costing system, costs are transferred from one work in process inventory account to the next as units are transferred from one processing department to another.

Kramer Company started its production operations on August 1. During August, the Printing Department completed 17,600 units. There were 4,400 units in ending inventory which were 80% complete with respect to materials and 10% complete with respect to conversion costs. During August, the department accumulated materials costs of $45,408 and conversion costs of $76,670.​ Required: a. Determine the cost of the goods transferred out. b. What is the value of the ending inventory?

If a company uses the weighted average method instead of FIFO, it will still get the same unit costs.

Match each phrase that follows with the term (a-e) it describes. -Provides information for controlling and improving operations A)Cost of production report B)Equivalent units of production C)First-in, first-out (FIFO) method D)Last-in, first-out (LIFO) method E)Whole units F)Yield

The cost of production report is often used by managers for analyzing the change in the conversion and direct materials cost per equivalent unit between periods.

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