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Exam 16: Process Costing and Analysis

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Question 61

Multiple Choice

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Medina Corp. had the following information available for the year: -FIFO equivalent units of production for the year are:

A) 3,320 units.
B) 3,200 units.
C) 3,240 units.
D) 3,520 units.
E) 3,420 units.

F) None of the above
G) A) and B)

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Question 62

Multiple Choice

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A company uses a process cost accounting system. Its Sewing Department's beginning inventory consisted of 50,000 units (1/4 complete with respect to direct labor and overhead) . The Sewing Department started and finished 120,000 units this period. Its ending inventory consists of 40,000 units (1/4 complete with respect to direct labor and overhead) . All direct materials are added at the beginning of the process. Under the Weighted Average inventory valuation method, what are the equivalent units of production for the Sewing Department for direct materials and for direct labor and overhead, respectively?

A) 210,000; 120,000
B) 210,000; 180,000
C) 167,500; 167,500
D) 160,000; 162,500
E) 160,000; 167,500

F) None of the above
G) A) and B)

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Question 63

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One section of the process cost summary describes the equivalent units of production for the department during the reporting period and presents the calculations of the costs per equivalent unit.

Partially completed production is measured for an account at two points in time for each accounting period. These measurement points and the account are ________________ and ____________.

A hybrid costing system would be most appropriate when:

Process and job order manufacturing operations both combine materials, labor, and overhead items in the process of producing products.

If the factory labor cost for a month was $123,000 (paid in cash), the following journal entry would be recorded by the process cost accounting system:

The number of equivalent units of production assigned to ending goods in process inventory should usually be equal to or less than the number of physical units in ending goods in process inventory.

A company's beginning work in process inventory consisted of 20,000 units that were 1/5 complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were 1/3 complete at the end of the period. Using the Weighted Average method, the equivalent units of production were:

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

The purchase of raw materials on account in a process costing system is recorded with a:

The following data are available for a company's manufacturing activities: Assume the company uses FIFO inventory. If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively?

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

The process cost summary is an important managerial accounting report produced by a process cost accounting system.

A department had 12,500 units which were 20% complete in beginning Goods in Process Inventory. During the current period 60,000 units were transferred in. Ending Goods in Process Inventory was 15,000 units which were 70% complete. Assume this company uses the FIFO method of process costing and direct material is added uniformly throughout the process. What are the equivalent units produced with respect to direct material?

Factory overhead costs can be allocated by a process cost accounting system to the output of production departments by using a predetermined overhead allocation rate.

The Filtering Department started the current month with beginning goods in process inventory of $55,000. During the month, it was assigned the following costs: direct materials, $77,000; direct labor, $44,000; and factory overhead, 20% of direct material cost. Also, inventory with a cost of $66,000 was transferred out of the department to the next phase in the process. The ending balance of the Goods in Process Inventory account for the Filtering Department is:

In the same time period, it is possible that a production department can produce 1,000 equivalent finished units with respect to direct materials and 1,200 equivalent finished units with respect to direct labor.

Iolaus Company provides the following data for the current year: Required: (a) Calculate the predetermined overhead allocation rate based on direct labor. (b) Determine the amount of overhead applied to production. (c) Prepare the journal entry to apply factory overhead to goods in process.

Que Corporation uses a process cost accounting system. The company manufactured certain goods at a cost of $800 and sold them on credit to Are Corporation for $1,075. The complete journal entry to be made by Que at the time of this sale is: