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Exam 20: Process Cost Accounting

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Question 61

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In process costing there is never a balance remaining in Factory Overhead that needs to be closed at period end.

A) True
B) False

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Question 62

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In process cost accounting, all labor that is applied exclusively in a single production department is considered to be direct labor.

A) True
B) False

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Question 63

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The last step in the four-step accounting procedure for process costing is the calculation of equivalent units of production.

Embark produces mulch for landscaping use. The following information summarizes production operations for June. The journal entry to record June production activities for direct labor usage is:

If a production department has 100 equivalent units of production with respect to direct materials in a given reporting period, the equivalent units of production with respect to direct labor also must be 100.

In a manufacturing operation with two process departments (1 and 2), the flow of costs would proceed from Goods in Process, Dept #1 to ______________.

The following is an account for a production department, showing its costs for one month: Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the units in ending goods in process inventory cost $4,590, and the started and completed units cost $41,850, what was the cost of completing the units in the beginning goods in process inventory?

Materials and labor costs that are clearly associated with a specific process are known as _________________. Those costs that are not clearly associated with a specific process are called ______________.

Which of the following statements is most accurate?

Equivalent units of production need to be determined only if a processing department adds materials and labor to its products at different rates.

The managers of process manufacturing systems focus on the series of processes needed to complete the production of products.

Equivalent units of production refer to the number of units that would be completed if all effort during a period had been applied only to those units that were started and completed in a period.

The FIFO method does not use the beginning inventory costs in computing the cost per equivalent unit for the current period.

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 goods in process inventory. The units in ending goods in process inventory were 50% complete with respect to both direct materials and conversion costs. There were 1,000 units in beginning goods 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.

Process cost accounting systems consider overhead costs to include those costs that cannot be traced to a specific process.

During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor. Compute the number of units transferred to finished goods.

Direct labor and indirect labor are recorded, respectively, to:

An organizational unit of a factory that has the responsibility for partially manufacturing or producing a product is called a:

A company uses the FIFO method for inventory costing. During a period, a production department had 20,000 units in beginning goods in process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending goods in process inventory and are 75% complete. Compute the number of equivalent units produced by the department.

Refer to the following information about the Painting Department in the Richardson Factory for the month of June. Richardson Factory uses the weighted-average method of inventory costing. Compute the total cost of all units that were completed and transferred to finished goods during June. Compute the total cost of the ending goods in process inventory.