Managerial Accounting Chapter 4

Which of the following is not a characteristic of operation costing?

Products are homogeneous.

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

True Both costing systems use the same manufacturing accounts to post costs.

Similarities between job-order costing and process costing include the

basic purpose to assign and compute product costs flow of costs through the manufacturing accounts manufacturing accounts used

Direct labor plus manufacturing overhead equals _____ cost.

conversion

Characteristics of operation costing include ______

costs are accumulated by department products are processed in batches

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

debit

Process costing accumulates costs by _________________

department

Conversion costs are __________________

direct labor plus manufacturing overhead

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.

Process costing produces _______________ units

homogenous

Operations costing is similar to process costing because

labor and overhead costs are accumulated by operation or department

Each department has a separate Work in Process account when using

process

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

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

transferred out

Costs transferred in from Department A to Department B

will always be 100% complete with respect to Department A

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

work in process

In process costing, manufacturing overhead costs are ________________

generally applied using a predetermined overhead rate

A processing department is an organization unit ______.

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

Number of partially completed units x Percentage completion = ___________ units

equivalent

To report ending inventory, partially completed units are translated into _____________ units

equivalent

Methods to calculate departmental unit costs include ______

weighted-average FIFO

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

paper towels. sunscreen. flour.

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 ($3,650 + $5,000) ÷ 250 = $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

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.

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

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

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

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

True In process costing, all units of the product are identical.

Costs per equivalent unit are used to value ______.

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

The journal entry to record labor cost in the first department is _______________ wages payable and _______________Work in process-Department #1

credit, debit