mgmt chapter 4

The journal entry to record the transfer of completed units to finished goods is (debit/credit) Finished Goods and (debit/credit) WIP.

1. debit 2. credit

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

1. job order cost 2. process costing

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

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

any

Costs per equivalent unit are used to value ______.

both units in ending inventory and units transferred to the next department

Characteristics of operation costing include

costs are accumulated by department products are processed in batches

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

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

In a processing department, all units of output are

homogeneous

Units in beginning WIP inventory + units started or transferred in = Units in production WIP inventory + units completed and transferred out.

know that

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

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

Industries/products more suitable for process costing than job-order costing include ______.

paper towels , sunscreen, flour

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

processing, operating, or assembly

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

true

The activity in a processing department is performed ______.

uniformly on all units

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

Materials, labor and overhead

Weighted-average

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

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

Transferred in

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.

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

Each department has a separate Work in Process account when using ______ costing.

process

story problem: 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 $.

weighted average method for EU per unit 4500+37800= 42300 42300/7050=6

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 material cost in the second department includes a (debit/credit) to WIP- Department #2

debit

A processing department is an organization unit ______.

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

Story problem: 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 ______.

2000 transferred + (100units that were 40% complete)= 2040 for EU of production sooo... -ignore beginning inventory for this part

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

Cost of goods sold and a credit to Finished goods

story problem: 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 ______.

EU per unit: (3650+5000)/250= 34.60 note: ignore the conversion costs

Weighted-average only Eu of production equation

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?

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

Job order

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

(100x.40)+300=340

EU per unit

(beginning work in process inventory + costs added during the period)/(EU of production)

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

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.

WIP

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

WIP