Chapter 5 LearnSmart
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
Industries/products more suitable for process costing than job-order costing include:
-flour. -paper towels. -sunscreen.
Methods to calculate departmental unit costs include ______.
-weighted-average -FIFO
The journal entry to record direct materials costs in processing Department #1 is debit ______.
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
Process costing accumulates costs by _____.
department
Number of partially completed units x Percentage completion of those units with respect to the processing in the department = _____ units.
equivalent
To report ending inventory, partially completed units are translated into _____ units.
equivalent
Prior costs are blended with current period costs when using the ______ method(s).
weighted-average
Differences between job-order and process costing include that process costing ______.
-accumulates costs by department -is used for indistinguishable products
A processing department is an organization unit ______.
where work is performed on a product, and materials, labor or overhead are added
When using process costing, each processing department has a separate _____ _____ _____ account.
work in process
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
The journal entry to record material cost in the second department includes a _____ to Work in Process-Department #2.
debit
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
Once production is completed in all processing departments, production costs are transferred to ______.
finished goods
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
Operations costing is similar to process costing because ______.
labor and overhead costs are accumulated by operation or department
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 ______ costing
only weighted-average
When products have both similar and individual characteristics, ______ costing is used.
operation
The weighted-average method includes costs for ______.
prior and current periods
Each department has a separate Work in Process account when using ______ costing.
process
Industries that convert raw materials into homogeneous products typically ______ use costing.
process
Work is performed on products, and materials, labor, or overhead costs are added to products in a(n) _____ department.
processing
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 ______ for purposes of determining the cost per unit.
transferred out
True or false: A processing department needs to calculate a separate unit cost for each type of cost incurred.
true
Match the costing method to the manner in which unit costs are calculated.
weighted-average method- Combines costs and outputs from the current and prior periods. FIFO method- Bases costs solely on the costs and outputs from the current period.
Costs transferred in from Department A to Department B ______.
will always be 100% complete with respect to Department A
Recording the transfer of partially completed products from one processing department to another, requires a journal entry that affects the ______ account of both processing departments.
work in process
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.
340
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
Which of the following is not a characteristic of operation costing?
Products are homogeneous.
Direct labor plus manufacturing overhead equals _____ cost.
conversion
The two most commonly used methods for determining unit product costs are _____-_____ costing and _____ costing.
job-order process
The flow of costs through manufacturing accounts is basically the same for job-order costing and process costing.
True
Work in process-Department #1 and credit Manufacturing overhead
True
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
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 $
$6
The formula for the cost per equivalent unit using the weighted-average method is Blank______.
(Cost of beginning work in process inventory + Cost added during the period) ÷ Equivalent units of production
Similarities between job-order costing and process costing include the _____.
-basic purpose to assign and compute product costs -manufacturing accounts used -flow of costs through the manufacturing accounts
Units in _____ work in process inventory + units started or transferred in = Units in _____ work in process inventory + units completed and transferred out
-beginning -ending
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 -debit
The journal entry to record the transfer of completed units to finished goods is _____ (debit/credit) Finished Goods and _____ (debit/credit) Work in Process.
-debit -credit
A processing department transferred 2,000 units to the next department. Ending work in process in the department contained 100 units that were 40% complete with regard to materials and 25% complete with regard to conversion costs. Using the weighted-average method, the equivalent units of production for materials is ______.
2,040
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.
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
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 journal entry to apply overhead cost to processing Department #1 is to debit ______.
Work in process-Department #1 and credit Manufacturing overhead
In process costing, manufacturing overhead costs are distributed to each department ______.
according to the amount of the allocation base incurred in the department
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
