Chapter 4 Accy 2

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 (1) equivalent units of production. (Enter your answer as a whole number.)

1. 340

When using process costing, each processing department has a separate (1) (2) (3) account. (Enter only one word per blank.)

1. work 2. in 3. process

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

Process costing accumulates costs by (1). (Enter only one word per blank.)

1. department

Select all that apply 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

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

equivalent units in ending work in process plus units transferred out

A company's beginning work in process contained 200 units that were 20% complete. Those units were completed and transferred to finished goods. During the period 4,300 units were started. Of the units started, 4,000 were transferred to finished goods. The 300 units in ending work in process were 30% complete. Using the weighted-average method, the equivalent units of production equals ______.

4,290

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.

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

True

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.

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

is used for indistinguishable products. accumulates costs by department.

Operations costing is similar to process costing because ______.

labor and overhead costs are accumulated by operation or department

When products have both similar and individual characteristics, ______ costing is used.

operation

Select all that apply Examples of products that may use operation costing include ______.

shoes clothing 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 ______ for purposes of determining the cost per unit.

transferred out

Select all that apply Methods to calculate departmental unit costs include ______.

weighted-average FIFO

A processing department is an organization unit ______.

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

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

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

work in process

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

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

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

finished goods

The weighted-average method includes costs for ______.

prior and current periods

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

process

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

weighted-average

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 $(1). (Enter your answer as a whole number.)

1. 6

To calculate cost per equivalent unit using the weighted-average method, add the cost of (1) work in process inventory to costs added during the period and divide by equivalent units of production. (Enter only one word per blank.)

1. beginning

In process costing, manufacturing overhead costs are ______.

generally applied using a predetermined overhead rate

The journal entry to record the transfer of completed units to finished goods is (1) (debit/credit) Finished Goods and (2) (debit/credit) Work in Process.

1. debit 2. credit

To report ending inventory, partially completed units are translated into (1) units. (Enter only one word per blank.)

1. equivalent

Number of partially completed units x Percentage completion = (1) (2). (Enter only one word per blank.)

1. equivalent 2. units

When production is completed in the last processing department, units are transferred to the (1) (2) account. (Enter only one word per blank.)

1. finished 2. goods

Products such as clothing that are produced in batches but can vary considerably from model to model may use (1) costing. (Enter only one word per blank.)

1. operation

Work is performed on products, and materials, labor, and overhead costs are added to products in a(n) (1) department. (Enter only one word per blank.)

1. processing

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

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 ______. Multiple choice question.

2,040

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 apply overhead cost to processing Department #1 is to debit ______.

Work in process-Department #1 and credit Manufacturing overhead

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

Costs per equivalent unit are used to value ______.

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

Select all that apply Characteristics of operation costing include ______.

costs are accumulated by department products are processed in batches

Conversion costs are ______.

direct labor plus manufacturing overhead

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

each batch is charged for its own specific materials

Units in (1) work in process inventory + units started or transferred in = Units in (2) work in process inventory + units completed and transferred out. (Enter either beginning or ending in each blank.)

1. beginning 2. ending

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

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

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

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

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

The correct journal entry to apply manufacturing costs to processing Department #1 is (1) (debit/credit) Manufacturing overhead and (2) (debit/credit) Work in process-Department #1.

1. credit 2. debit

The journal entry to record labor cost in the first department is (1) (debit/credit) Wages payable and (2) (debit/credit) Work in process-Department #1.

1. credit 2. debit

The journal entry to record material cost in the second department includes a (1) (debit/credit) to Work in Process-Department #2.

1. debit

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

1. debit