ACCT 3030 Ch. 4

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.

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.

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

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

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

job-order and process

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

When using process costing, each processing department has a separate ____________ account

work in process account

Equivalent units of production under the weighted-average method equals:

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

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 Reason: ($3,650 + $5,000) ÷ 250 = $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

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

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

according to the amount of the allocation base incurred in the department

processing department

an organizational unit where work is performed on a product and where materials, labor, or overhead costs are added to the product

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

Fill in the blank question. Number of partially completed units x Percentage completion = ___________ units.

equivalent

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 ______.

279 Reason: 150 + (215 × 60%) = 279

Costs per equivalent unit are used to value ______.

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

Process costing accumulates costs by_________

department

Conversion costs are ______.

direct labor plus manufacturing overhead

A processing department is an organization unit ______.

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

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. Listen to the complete question

credit, debit

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, debit

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

weighted average

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

transferred out

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

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

finished goods

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

true Reason: Both costing systems use the same manufacturing accounts to post costs.

True or false: Process costing is used when a company produces a continuous flow of units that are homogeneous.

true Reason: In process costing, all units of the product are identical.

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

Costs transferred in from Department A to Department B ______.

will always be 100% complete with respect to Department A

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

finished goods

Methods to calculate departmental unit costs include ______.

FIFO weighted-average

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

Process Costing

A system for assigning costs to a large number of identical units that typically pass through a series of uniform production steps. Costs are averaged over the units produced such that each unit bears the same unit cost.

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 $ _______.

6.00

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

equivalent

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

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

debit

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

false Reason: The equivalent units already include work accomplished in prior periods.

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

processing department

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

transferred in

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

Fill in the blank question. 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