Cost Accounting exam 2
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
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 labor cost in the first department is ____________(debit/credit) Wages payable and ______________(debit/credit) Work in process-Department #1.
credit, debit
Process costing accumulates costs by _______________.
department
The two common methods for determining unit product costs are ______ costing.
job-order and process
Each department has a separate Work in Process account when using ______ costing.
process
Work is performed on products, and materials, labor, or overhead costs are added to products in a(n) ________________ department.
processing
True or false: Process costing is used when a company produces a continuous flow of units that are homogeneous.
true
True or false: The flow of costs through manufacturing accounts is basically the same for job-order costing and process costing.
true
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
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
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
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 material cost in the second department includes a _____________(debit/credit) to Work in Process-Department #2.
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
Conversion costs are ______.
direct labor plus manufacturing overhead
Number of partially completed units x Percentage completion = __________units.
equivalent
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
Similarities between job-order costing and process costing include the ______.
manufacturing accounts used flow of costs through the manufacturing accounts basic purpose to assign and compute product costs
Industries that convert raw materials into homogeneous products typically use ______________ costing.
process
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 apply overhead cost to processing Department #1 is to debit ______.
Work in process-Department #1 and credit Manufacturing overhead
To report ending inventory, partially completed units are translated into ___________units.
equivalent
Equivalent units of production under the weighted-average method equal ______.
equivalent units in ending work in process plus units transferred out
The two common methods for determining unit product costs are ______ costing
job-order and process
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 record direct labor costs in processing Department #1 is debit ______,
Work in process-Department #1 and credit Salaries and wages payable
The two most commonly used methods for determining unit product costs are_______ -__________ costing and _______________costing.
job, order, process
Methods to calculate departmental unit costs include ______.
weighted-average, FIFO
FIFO method
Bases costs solely on the costs and outputs from the current period.
Weighted-average method
Combines costs and outputs from the current and prior periods.
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
A processing department is an organization unit ______.
where work is performed on a product, and materials, labor or 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
When using process costing, each processing department has a separate ___________ ____________ ______________account.
work in 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
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
In process costing, manufacturing overhead costs are distributed to each department ______.
according to the amount of the allocation base incurred in the department
Differences between job-order and process costing include that process costing ______.
accumulates costs by department is used for indistinguishable products
Units in ________________work in process inventory + units started or transferred in = Units in ______________work in process inventory + units completed and transferred out.
beginning, ending
Costs per equivalent unit are used to value ______.
both units in ending inventory and units transferred to the next department
