UFC1 ch 3 quiz

Process design

Reorganize production processes to improve efficiency.

Which products is least likely to be produced in a process manufacturing system?

oil paintings

Direct labor and indirect labor are recorded, respectively, to:

Goods in Process and Factory Overhead.

Which of the following journal entries correctly records the current month's activity where $60,000 of direct material and $17,000 of indirect materials were used in the production process?

Goods in process 60,000 factory overhead 17,000 Raw materials inventory 77,000

A company that applies process costing is most frequently characterized by:

Homogeneous product and high production volume.

An organizational unit of a factory that has the responsibility for partially manufacturing or producing a product is called a:

Production department.

To compute an equivalent unit of production, one must be able to reasonably estimate:

The percentage of completion

The Machining Department started the current month with beginning goods in process inventory of $10,000. During the month, it was assigned the following costs: direct materials, $76,000; direct labor, $24,000; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of $109,000 was transferred out of the department to the next phase in the process. The ending balance of the Goods in Process Inventory account for the Machining Department is:

$10,000 + $76,000 + $24,000 + $12,000 - $109,000 = $13,000

The Filtering Department started the current month with beginning goods in process inventory of $55,000. During the month, it was assigned the following costs: direct materials, $77,000; direct labor, $44,000; and factory overhead, 20% of direct material cost. Also, inventory with a cost of $66,000 was transferred out of the department to the next phase in the process. The ending balance of the Goods in Process Inventory account for the Filtering Department is:

$55,000 + $77,000 + $44,000 + $15,400 - $66,000 = $125,400

Medina Corp beginning inventory of goods in process (40% complete, $1,100) 200 units Ending inventory of goods in process (80% complete) 400 units total units started during the year 3,200 units

200 beginning + 3,200 started - 400 ending = 3,000 transferred out If the weighted average inventory method were used, the equivalent units for the year would be: 3,000 + (400 x .8) = 3,320

The following data are available for a company's manufacturing activities: Picture Assume the company uses FIFO inventory. If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively?

21,000; 19,250 DM: 15,000 + 6,000 = 21,000 DL: (5,000 x .25) + 15,000 + (6,000 x .5) = 19,250

The following data are available for a company's manufacturing activities: Picture Assume the company uses the Weighted Average inventory method. If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively?

26,000; 23,000 DM: 20,000 + 6,000 = 26,000 DL: 20000 + (6,000 x .5) = 23,000

A company's beginning work in process inventory consisted of 20,000 units that were 1/5 complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were 1/3 complete at the end of the period. Using the Weighted Average method, the equivalent units of production were:

80,000 + (30,000)(1/3) = 90,000

A company's beginning work in process inventory consisted of 20,000 units that were 1/5 complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were 1/3 complete at the end of the period. Using FIFO, the equivalent units of production were:

86,000

In a process costing operation, the direct labor of a production department includes:

All labor used exclusively by that department, even if the labor is not applied to the product itself.

Automation

Combines labor with overhead, so the focus is on conversion cost per equivalent units.

Which of the following is true when computing cost per equivalent unit in a FIFO process costing system?

Costs incurred in the current period are divided by the equivalent units of production.

Which of the following characteristics does not usually apply to process manufacturing systems?

Each unit of product is separately identifiable.

Which of the following characteristics applies to process cost accounting and not to job order cost accounting?

Equivalent units of production.

Just in time production

Raw materials inventory and finished goods inventory accounts are not needed.

After posting all actual factory overhead and applying factory overhead to production departments in a process costing system:

There may be over or underapplied overhead.

Hou Company applies factory overhead to its production departments on the basis of 90% of direct labor costs. In the Assembly Department, Hou had $125,000 of direct labor cost, and in the Finishing Department, Hou had $35,000 of direct labor cost. The entry to apply overhead to these production departments is:

work in process - Assembly 112,500 work in process - Finishing 31,500 factory overhead 144,000