525 Chapter 4 HW

Which of the following statements about companies that use processing costing is false? a. A processing department is an organizational unit where work is performed on a product and where materials, labor, or overhead costs are added to the product. b. Costs are accumulated by department. c. Raw material costs are added only to the first processing department. d. A separate Work in Process account is maintained for each processing department.

c. Raw material costs are added only to the first processing department.

The cost of beginning work in process inventory plus the costs added to production during the period equals the _______. a. cost of ending work in process inventory b. cost of units transferred out c. total cost to be accounted for d. cost of units started during the period

c. total cost to be accounted for

A company has three processing departments: Mixing, Baking, and Packaging. The Baking Department transfers 500 units to the Packaging Department. How will the Packaging Department account for the costs of those 500 units? a. Finished goods b. Cost of input materials c. Costs transferred in d. Costs transferred out

c. Costs transferred in

Sneaker Styles Company manufactures a wide variety of sneakers. Which of the following systems is most suitable for Sneaker Styles? a. Job-Order Costing b. Process Costing c. Operation Costing d. Variable Costing

c. Operation Costing

Indicate which account should be debited and which account should be credited. Finished snowboards that cost $100,000 were sold to customers.

Debit: Cost of Goods Sold Credit: Finished Goods

Indicate which account should be debited and which account should be credited. Finished snowboards worth $80,000 were transferred from the Shaping Department to the finished goods warehouse.

Debit: Finished Goods Credit: Work in Process—Shaping

Indicate which account should be debited and which account should be credited. Raw materials worth $12,000 were issued for use in the Cutting Department.

Debit: Work in Process—Cutting Credit: Raw Materials

Indicate which account should be debited and which account should be credited. Manufacturing overhead was applied to the Shaping Department, $10,000.

Debit: Work in Process—Shaping Credit: Manufacturing Overhead

Indicate which account should be debited and which account should be credited. Unshaped, cut snowboards worth $60,000 were transferred from the Cutting Department to the Shaping Department.

Debit: Work in Process—Shaping Credit: Work in Process—Cutting

Conversion cost is composed of _______. a. direct labor cost and manufacturing overhead cost b. direct material cost and manufacturing overhead cost c. all costs included in ending inventory d. manufacturing overhead

a. direct labor cost and manufacturing overhead cost

Equivalent units is computed using which of the following formulas? a. Equivalent units = Number of completed units x Percentage completion b. Equivalent units = Number of partially completed units x Percentage completion c. Equivalent units = Number of completed units x (100% - Percentage completion) d. Equivalent units = Number of partially completed units x (100% ÷ Percentage completion)

b. Equivalent units = Number of partially completed units x Percentage completion

Which of the following statements about processing costing is false? a. Process costing accumulates costs by department. b. Process costing assigns departmental costs uniformly to all identical units that pass through the department during a period. c. Process costing systems compute unit costs by department. d. Process costing is used when a company produces a continuous flow of units that are distinguishable from one another.

d. Process costing is used when a company produces a continuous flow of units that are distinguishable from one another.