Chapter 5 LearnSmart

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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

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

-flour. -paper towels. -sunscreen.

Methods to calculate departmental unit costs include ______.

-weighted-average -FIFO

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 direct labor costs in processing Department #1 is debit ______,

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

Process costing accumulates costs by _____.

department

Number of partially completed units x Percentage completion of those units with respect to the processing in the department = _____ units.

equivalent

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

equivalent

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

weighted-average

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

-accumulates costs by department -is used for indistinguishable products

A processing department is an organization unit ______.

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

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

work in process

Costs per equivalent unit are used to value ______.

both ending inventory and units transferred to the next department

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

debit

The journal entry to record material cost in the second department includes a _____ to Work in Process-Department #2.

debit

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

each batch is charged for its own specific materials

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

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

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

job-order and process

Operations costing is similar to process costing because ______.

labor and overhead costs are accumulated by operation or department

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 ______ costing

only weighted-average

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

operation

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

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

processing

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

True or false: A processing department needs to calculate a separate unit cost for each type of cost incurred.

true

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

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.

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

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

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.

Direct labor plus manufacturing overhead equals _____ cost.

conversion

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

job-order process

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

True

Work in process-Department #1 and credit Manufacturing overhead

True

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

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

The formula for the cost per equivalent unit using the weighted-average method is Blank______.

(Cost of beginning work in process inventory + Cost added during the period) ÷ Equivalent units of production

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

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

-beginning -ending

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.

-credit -debit

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

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

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.

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

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

Work in process-Department #1 and credit Manufacturing overhead

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

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

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


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