Chapter 5- Accounting

Industries that convert raw materials into homogeneous products typically use ____ costing.

Process.

Which of the following is not a characteristic of operation costing?

Products are homogeneous.

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

Job-order and process.

When production is completed in the last processing department, units are transferred to the _____ ______ account.

Finished goods.

In a processing department, all units of output are______.

Identical

A processing department produces Blank______ units.

Identical and homogeneous.

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

Job-order and process.

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 Blank______ costing.

only weighted-average.

The two most commonly used methods for determining unit product costs are ____ - ____ costing and ____ costing.

Job-order costing and process costing

The journal entry to record the transfer of partially completed products from processing Department #1 to processing Department #2 is to debit Work in Process Department ______.

#2 and credit Work in Process-Department #1

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 ______.

$34.60.

A company transferred 150 units to finished goods and has 215 units in ending work in process inventory that are 60% complete. Using weighted-average costing, the number of equivalent units is Blank______.

(250 + (215x60%)) = 279

Costs in beginning work in process inventory was $4,500 and $37,800 in costs were added during the period. If there are 7,050 equivalent units, the cost per equivalent unit under the weighted-average method is $___ .

(4,500+ 37,800) / 7050 = 6 or 6.00

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.

Using the weighted-average method, if work in process inventory has 100 units that are 40% complete and 300 units were transferred to the next department during the period, there are a total of equivalent units of production.

300 + (100 x 40%) = 340.

If ending work in process contains 300 units that are 40% complete the number of equivalent units is Blank______.

300 x 40% = 120

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

500 x 34%=170

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

According to the amount of the allocation base incurred in the department.

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

Accumulates costs by department and is used for indistinguishable products.

Units in _____ work in process inventory + units started or transferred in = Units in ____ work in process inventory + units completed and transferred out.

Beginning and ending.

When computing the equivalent units of production under the weighted-average method, the fact that the units in the ______ were partially complete with respect to materials and conversion is ignored.

Beginning work in process inventory.

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.

Direct labor plus manufacturing overhead equals _____ cost.

Conversion.

The entry to record the sale of finished goods to customers is a debit to Blank______.

Cost of goods sold and a credit to Finished goods.

Characteristics of operation costing include ______.

Costs are accumulated by department and products are processed in batches.

The correct journal entry to apply manufacturing costs to processing Department #1 is (debit/credit) Manufacturing overhead and (debit/credit) Work in process-Department #1.

Credit and Debit.

The journal entry to record the transfer of completed units to finished goods is ____ Finished Goods and _____ Work in Process.

Debit and credit.

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

Each batch is charged for its own specific materials.

Equivalent units of production under the weighted-average method equals ______.

Equivalent units in ending work in process plus units transferred out.

Number of partially completed units x Percentage completion of those units with respect to the processing in the department = _____ units.

Equivalent.

The journal entry to record the transfer of completed units to the finished goods warehouse is to debit ______.

Finished goods and credit Work in process.

Once production is completed in all processing departments, production costs are transferred to Blank______.

Finished goods.

Job-order costing is used for ____.

Many different products with unique production requirements.

When using process costing, which of the following can be added in any department?

Materials, labor and overhead.

Products such as clothing that are produced in batches but can vary considerably from style to style may use _____ costing.

Operation.

The weighted-average method includes costs for ______.

Prior and current periods.

Process costing accumulates costs by _____.

Process or department.

Examples of products that may use operation costing include ______.

Shoes, clothing, and jewelry.

When unit costs are transferred from Department A to Department B, Department B will treat the costs as ______.

Transferred in.

The equivalent units completed are valued the same as units Blank______ for purposes of determining the cost per unit.

Transferred out.

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

True.

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

True.

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.

Methods to calculate departmental unit costs include ______.

Weighted-average and FIFO.

Match the costing method to the manner in which unit costs are calculated.

Weighted-average method matches: Choice Combines costs and outputs from the current and prior periods. FIFO method matches: Choice Bases costs solely on the costs and outputs from the current period.

Prior costs are blended with current period costs when using the ______ method(s).

Weighted-average.

The journal entry to record direct materials costs in processing Department #1 is debit Blank______.

Work in Process-Department #1 and credit Raw Materials.

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

Recording the transfer of partially completed products from one processing department to another, requires a journal entry that affects the Blank______ account of both processing departments. Multiple choice question.

Work in process.

When using process costing, a separate Blank______ account is maintained for each processing department.

Work in process.

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

Work in process.

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

a. manufacturing accounts used. b. flow of costs through the manufacturing accounts. c. basic purpose to assign and compute product costs.

Operations costing is similar to process costing because ______.

labor and overhead costs are accumulated by operation or department.

A processing department is an organization unit Blank______

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

Costs transferred in from Department A to Department B ______.

will always be 100% complete with respect to Department A.

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

Job-order.

When using process costing, materials, labor and overhead may be added in Blank______ processing department.

Any.

Costs per equivalent unit are used to value ______.

Both ending inventory and units transferred to the next department.

The journal entry to record material cost in the second department includes a (debit/credit) to Work in Process-Department #2.

Debit.

To report ending inventory, partially completed units are translated into _____ units.

Equivalent.

In process costing, manufacturing overhead costs are ______.

Generally applied using a predetermined overhead rate.

Process costing produces _____ units.

Homogeneous

The journal entry to record labor cost in the first department is (debit/credit) Wages payable and (debit/credit) Work in process-Department #1.

Credit and debit.

When a customer's order is filled and units are sold, there is a Blank______ to Finished Goods and a Blank______ to Cost of Goods Sold. Multiple choice question.

Credit, debit.

True or false: When using process costing, labor and overhead can be added in any department, but materials can only be added in the first processing department.

False

The equivalent units of production computed under the weighted-average method takes into account the percentage completed of the beginning inventory.

False.

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

Processing.