Chapter 5 - Process Costing

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

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

generally applied using a predetermined overhead rate

In process costing, manufacturing overhead costs are:

operation

In situations where products have some common characteristic and some individual characteristics, ________ costing is used.

Work in Process-Department #1 and credit Raw Materials

The journal entry to record direct materials costs in processing Department #1 is debit:

debit

The journal entry to record material cost in the second department would include a _______ to Work in Process-Department 2

True

True or false: The equivalent units of production computed under the weighted-average method does not take into account the percentage completed of the beginning inventory.

beginning work in process

When computing the equivalent units of production under the weighted-average method, partially completed _______ inventory is ignored

170 500 * 34% = 170

When ending work in process contains 500 units that are 34% completed, there are _______ equivalent units.

transferred in

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

work in process

When using process costing, each processing department has a separate _______ ___ _______ account.

beginning (first blank) ending (second blank)

Units in _______ work in process inventory + units started or transferred in = Units in _______ work in process inventory + units completed and transferred out.

340 300 + (100 * 40%) = 340

Using the weighted-average method, there are a total of _______ equivalent units of production if work in process inventory has 100 units that are 40% complete and 300 units were transferred tot he next department during the period.

beginning (first blank) ending (second blank)

When preparing a cost reconciliation report, cost to be accounted for include _______ work in process inventory, while cost accounted for include _______ work in process inventory.

in any

When using process costing, materials can be added ___ _____ processing department

Materials, labor and overhead

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

each batch is charged for its own specific materials

Operations costing is similar to job-order costing because:

$34.60 ($3,650 + $5,000) / 250 = $34.60

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 material is:

finished goods

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

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 is a key difference between process and job-order costing?

b) homogeneous d) identical

A processing department produces _______ units. (Select all that apply) a) unique b) homogeneous c) heterogeneous d) identical

many different products with unique production requirements

Job-order costing is used for:

processing

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

direct labor plus manufacturing overhead

Conversion costs are:

Weighted-average only

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?

b) flour c) sunscreen d) paper towels

Industries/products more suitable for process costing that job-order costing include: (Select all that apply) a) shipbuilding b) flour c) sunscreen d) paper towels

work in process

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

credit (first blank) debit (second blank)

The correct journal entry to apply manufacturing costs to processing Department #1 would be to _______ Manufacturing overhead and _______ Work in process-Department #1

$6 ($4,500 + $37,800) / 7,050 = $6

Cost in beginning work in process inventory was $4,500 and $37,800 in costs were added during the period. Under the weighted-average method, if there are 7,050 equivalent units, the cost per equivalent unit is $_______.

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

Costs per equivalent unit are used to value:

a) jewelry c) shoes d) clothing

Examples of products that may use operation costing include: (Select all that apply) a) jewelry b) flour c) shoes d) clothing

a) manufacturing accounts used b) flow of costs through the manufacturing accounts d) basic purpose to assign and compute product costs

Similarities between job-order costing and process costing include the: (Select all that apply) a) manufacturing accounts used b) flow of costs through the manufacturing accounts c) way in which unit costs are calculated d) basic purpose to assign and compute product costs

Cost of goods sold and a credit to Finished goods

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

transferred out

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

Work in process-Department #1 and credit Manufacturing overhead

The journal entry to apply overhead cost to processing Department #1 is to debit:

Work in process-Department #1 and credit Salaries and wages payable

The journal entry to record direct labor costs in processing Department #1 is debit:

debit (first blank) credit (second blank)

The journal entry to record the transfer of completed units to finished goods would be to _______ Finished Goods and _______ Work in Process.

Finished goods and credit Work in process

The journal entry to record the transfer of completed units to the finished goods warehouse is to debit:

job-order (first and second blanks) process (third blank)

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

beginning

To calculate cost per equivalent unit using the weighted-average method, add the cost of _______ work in process inventory to cost added during the period and divide by equivalent units of production.

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

Math the costing method to the manner in which unit costs are calculated: Weighted-average method & FIFO method Combines costs and outputs from the current and prior periods & Bases costs solely on the costs and outputs from the current period

equivalent units

Number of partially completed units * Percentage completion - _______ ______