Chapter 4 AC 361

When ending work in process contains 500 units that are 34% completed, there are ? units

170

Which of the following is a key difference between process and job-order costing?

Under process costing, it makes no sense to try to identify materials, labor and overhead costs with a particular customer order.

Direct labor plus manufacturing overhead equals ? cost

conversion

Conversion costs are ______.

direct labor plus manufacturing overhead

Operations costing is similar to process costing because ______.

labor and overhead costs are accumulated by operation or department

Job-order costing is used for ______.

many different products with unique production requirements

The activity in a processing department is performed ______.

uniformly on all units

Which of the following equations is correct?

Units in beginning WIP + units started or transferred in = Units in ending WIP + units completed and transferred out

Equivalent units of production equals the number of units transferred to the next department (or finished goods) plus equivalent units in ending work in process under which method(s) of costing?

Weighted-average only

A product requires processing in two departments, A and B. Products start in Dept. A. Costs transferred out of Dept. A will be transferred to ______.

Work in Process - Dept. B

The correct journal entry to apply manufacturing costs to processing Department #1 is ? Manufacturing overhead and ? Work in process-Department #1.

Credit, Debit

When production is completed in the last processing department, units are transferred to the ? department

Finished Goods

Process costing accumulates costs by

department, operation, or process

Number of partially completed units x Percentage completion = ? units

equivalent

To report ending inventory, partially completed units are translated into ? units

equivalent

Similarities between job-order costing and process costing include the ______.

flow of costs through the manufacturing accounts manufacturing accounts used basic purpose to assign and compute product costs

A processing department produces ________ units.

homogeneous identical

The two most commonly used methods for determining unit product costs are ? costing and ?

job order, process

When using process costing, each processing department has a separate ? account.

Work In Process

Operations costing is similar to job-order costing because ______.

each batch is charged for its own specific materials

Process costing produces ______ units.

homogeneous

When many different jobs or products are worked on each period, the most likely costing system used is ______.

job-order

Characteristics of operation costing include ______.

products are processed in batches costs are accumulated by department

A processing department is an organization unit ______.

where work is performed on a product, and materials, labor or overhead are added

Examples of products that may use operation costing include ______.

clothing jewelry shoes

To calculate cost per equivalent unit using the weighted-average method, add the cost of ? work in process inventory to costs added during the period and divide by equivalent units of production.

Beginning

Methods to calculate departmental unit costs include ______.

weighted-average FIFO

The formula for the cost per equivalent unit using the weighted-average method is ______.

(Cost of beginning work in process inventory + Cost added during the period) ÷ Equivalent units of production

In process costing, manufacturing overhead costs are ______.

generally applied using a predetermined overhead rate

The two common methods for determining unit product costs are ______ costing.

job-order and process

Differences between job-order and process costing include that process costing ______.

is used for indistinguishable products accumulates costs by department

FIFO method

Bases costs solely on the costs and outputs from the current period.

Weighted-average method matches

Combines costs and outputs from the current and prior periods.

In situations where products have some common characteristics and some individual characteristics ? costing is used.

Operation

Work is performed on products, and materials, labor, or overhead costs are added to products in a(n) ? department

Processing

A processing department needs to calculate a separate unit cost for each type of cost incurred.

True

Process costing is used when a company produces a continuous flow of units that are homogeneous.

True

The flow of costs through manufacturing accounts is basically the same for job-order costing and process costing.

True

The journal entry to record direct labor costs in processing Department #1 is debit ______,

Work in process-Department #1 and credit Salaries and wages payable

In process costing, manufacturing overhead costs are distributed to each department ______

according to the amount of the allocation base incurred in the department

When computing the equivalent units of production under the weighted-average method, partially completed ______ inventory is ignored.

beginning work in process

Canners Company uses weighted-average costing. Beginning work in process inventory had $3,650 of material costs. During the period, $5,000 of materials and $9,250 in conversion costs were added. If there are 250 equivalent units of production for materials, the cost per equivalent unit for materials is ______. Multiple choice question. $34.60

($3,650 + $5,000) ÷ 250 = $34.60