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Exam 3: Process Costing and Analysis

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Question 41

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If the predetermined overhead allocation rate is 350% of direct labor cost and the Painting Department's direct labor cost for the reporting period is $20,000, the following entry would record the allocation of overhead to the products processed in this department:

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Question 42

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If the indirect materials cost for a reporting period was $37,500, the following journal entry would be recorded by the process cost accounting system:

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Question 43

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A manufacturing company may choose to use either a job order cost accounting system or a process cost accounting system, without considering the manner in which it produces its products.

"Equivalent units of production" is an engineering term used to describe the process by which one company attempts to manufacture units of a product that are equivalent to the product manufactured by a competitor.

Which of the following journal entries correctly records the current month's activity where $60,000 of direct material and $17,000 of indirect materials were used in the production process?

What was the cost of the direct labor used in the Bagging Department?

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

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

Refer to the following information about the Painting Department in the Richardson Factory for the month of June: -If FIFO is used, what was the materials cost per equivalent unit produced during June? What was the labor and overhead cost per equivalent unit produced during June?

Briefly explain the conditions under which job order cost accounting systems and process cost accounting systems are commonly applied.

Process cost accounting systems are commonly used by companies that manufacture standardized products by passing them through a series of manufacturing steps.

Direct costs in process cost accounting include only those costs that can be readily identified with particular product units.

When a process cost accounting system records the purchase of raw materials, the Raw Materials Inventory account is debited.

Which of the following characteristics applies to process cost accounting and not to job order cost accounting?

Process costing is applied to operations with repetitive production and heterogeneous products.

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 ________________.

What total cost should be assigned to the units that were started and completed during August?

The second step in accounting for production activity in a period is to compute ______________________.

A company that uses a process cost accounting system maintains separate Goods in Process Inventory accounts for each of its manufacturing departments.

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