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Exam 20: Process Costing

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Question 31

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Hybrid costing systems can only be applied to auto manufacturing.

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Question 32

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A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Goods in Process Inventory account at the beginning of the period.

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Question 33

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Prepare the required general journal entries to record the following transactions for the Bell Company. a.Purchased $40,000 of raw materials on account. b.Used $12,000 of direct materials in the production department. c.Used $5,000 of indirect materials.

When defining direct costs and indirect costs in process costing,it is the process that is the cost object.

The following data are available for a company's manufacturing activities: Beginning goods in process inventory ………..5,000 units,1/4 of the labor added this period Units started and completed ………..15,000 Ending goods in process inventory ………..6,000 units,1/2 of the labor added this period 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 using the FIFO method of process costing?

If Department A uses $10,000 of direct materials and Department B uses $15,000 of direct materials,the following journal entry would be recorded by the process cost accounting system: Goods in Process Inventory,Department A 10,000 Goods in Process Inventory,Department B 15,000 Raw Materials Inventory…………………. 25,000

In a process cost accounting system,the purchase of raw materials is debited to the Raw Materials Inventory.

Companies that use a series of repetitive manufacturing processes to produce standardized products should use a process cost accounting system.

If the predetermined overhead allocation rate is 225% of direct labor cost,and the Mixing Department's direct labor cost for the reporting period is $10,000,the following entry would be made to record the allocation of overhead to the products processed in this department: Goods in Process Inventory,Mixing Dept …… 225,000 Factory Overhead……………………….. 225,000

In process costing,indirect materials are charged directly to Goods in Process Inventory.

In a process costing accounting system,factory wages are debited to ___________,and when direct labor is used,that account is credited and ______________ is debited.When indirect labor is used,the ____________ account is debited and _____________ is credited.

A process cost summary is an accounting report that describes the costs charged to a department,the equivalent units of production by the department,and how the costs were assigned to the output.

An equivalent unit of production is an estimate of efforts that is used to calculate the ______________ of each production component.

What are the four steps in accounting for production activity in a period?

If a process has _______________ or _______________ inventory of partially completed production,equivalent units must be calculated so that total costs incurred during the period are assigned to all units worked on.

A company uses the weighted average method for inventory costing.During a period,Department A finished and transferred 50,000 units to Department B.Also,during the period,10,000 units were started but brought only to a stage of being 3/5 completed.The number of equivalent units produced by Department A during the period was:

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

If the predetermined overhead allocation rate is 85% of direct labor cost,and the Painting Department's direct labor cost for the reporting period is $20,000,the following entry would be made to record the allocation of overhead to the products processed in this department: Factory Overhead ………………… 17,000 Goods in Process Inventory,Painting Dept ………………… 17,000

In a process operation,the direct labor of a production department includes:

The Packing Department transferred out completed units with a cost of $74,000.This transfer should be recorded with the following entry: Finished Goods Inventory……………………. 74,000 Goods in Process Inventory,Packing Dept. ……… 74,000