ACCT 212 CH.3
Which of the following is most likely to use a process costing system?
A company that makes one style office chair
Equivalent Unit
A measure used to convert partially completed units into the equivalent of a full unit. Units in Ending Inventory X % of Completion
Manufacturing Costs
Are accumulated by process rather than by job.
Non-manufacturing Goods
Are expenses during the period incurred rather than being counted as part of the cost of the product.
Cost per Equivalent Unit
Beginning Inventory + Current Cost / Equivalent Units
When calculating equivalent unit cost using the weighted average method , which of the following amounts are combined?
Beginning WIP and current period costs.
WIP includes:
DM, DL, and MOH
Process costing is most likely to be used to calculate cost for which of the following products?
Golf Balls
Manufacturing Overhead
Includes all costs other than direct materials and direct labor that are incurred to manufacture a physical product.
Which of the following statements about process costing is false?
Process costing keeps a separate record, or cost sheet, for each unit produced.
Transferred-in Cost
Represents the manufacturing cost that is transferred from one production process to another.
Which of the following costs would not flow through the WIP inventory account:
Sales commissions
Weighted-Average Method
Simpler and more commonly used in the real world. Averages the cost of the units in beginning inventory and the cost of the units that were started during the current period.
Cost of goods manufactured or cost of goods completed
The cost transferred from WIP inventory into finished goods inventory.
Production Report
The foundation of a process costing system. This report provides info about the number of units and manufacturing cost that flow through a production process during an accounting period. It is also used to determine how much manufacturing cost to transfer out of WIP Inventory and into the next processing department and to value any units that are in process at the end of the accounting period.
Direct Labor
The hands-on labor that can be directly and conveniently traced to the product.
Direct Materials
The major material inputs that can be directly and conveniently traced to the product.
Units Started and Completed
Units started or Completed-units in beginning or ending inventory.
Cost of Goods Sold
When a product is sold, the manufacturing costs are transferred here where they are matched against sales revenue on the income statement.
Conversion Cost
When you combine direct labor and manufacturing overhead costs together in a single category. =DL+MOH
The primary difference between FIFO and weighted average methods of process costing has to do with the treatment of
beginning inventory