Accounting Chapter 4

Sneaker Styles Company manufactures a wide variety of sneakers. Which of the following systems is most suitable for Sneaker Styles?

Operation Costing

Which of the following statements about processing costing is false? A. Process costing accumulates costs by department. B. Process costing assigns departmental costs uniformly to all identical units that pass through the department during a period. C. Process costing systems compute unit costs by department. D. Process costing is used when a company produces a continuous flow of units that are distinguishable from one another.

Process costing is used when a company produces a continuous flow of units that are distinguishable from one another.

Calculate the Cost of Ending Work in Process

Units transferred to the Next Department x Cost per equivalent unit

Conversion cost is composed of _______.

direct labor and manufacturing overhead

Calculate the Cost to be Accounted For:

Cost of Beginning Work In Process Inventory + Cost Added to the Production During the Period

Compute Conversion Cost

Direct Labor+MFG Overhead Cost

Which of the following statements about companies that use processing costing is false? A. A processing department is an organizational unit where work is performed on a product and where materials, labor, or overhead costs are added to the product. B. Costs are accumulated by department. C. Raw material costs are added only to the first processing department. D. A separate Work in Process account is maintained for each processing department.

Raw material costs are added only to the first processing department.