Ch5. Process Costing

when computing the equivalent units of production under the weighted-average method, partially completed _____ inventory is ignored

beginning work in process

When a customer's order is filled and units are sold there is a _____ to finished goods and a _____ to cost of goods sold

credit, debit

Costs in beginning work in process inventory was $4,500 and $37, 800 in costs were added during the period. Under the weighted-average method, if there are 7,050 equivalent units, the cost per equivalent unit is $ _____.

$6 $4,500 + $37,800 = 42,300 $42,300 / 7,050 = $6.00

When ending work in process contains 500 units that are 34% completed, there are _____ equivalent units.

170 Units 500 X 34% = 170

Using the weighted-average method, if work in process inventory has 100 units that are 40% complete and 300 units were transferred to the next department during the period, there are a total of _____ equivalent units of production.

340 300 + ( 100 x 40% ) = 340

Number of partially completed units x percentage completion =

equivalent units

When production is completed in the last processing department, units are transferred to the _____ _____ account.

finished good

Costs per equivalent unit are used to value:

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

Match the costing method to the manner in which unit costs are calculated. Weighted-average method FIFO method

Combines costs and outputs from the current and prior periods Bases costs solely on the costs and outputs from the current period

Identify where the following items appear on a cost reconciliation report:

Costs to be accounted for: -Cost of beginning work in process inventory. -Costs added to production during the period. Costs accounted for: -Costs of units transferred out. -Cost of ending work in process inventory.

The journal entry to record the transfer of completed units to the finished goods is _____ (debit/credit) Finished Goods and _____ (debit/credit) Work in Process.

Debit finished goods Credit work in process

Operations costing is similar to job-order costing because _____.

Each batch is charged for its own specific materials

Similarities between job-order costing and process costing include the _____.

Flow of costs through the manufacturing accounts Manufacturing accounts used Basic purpose to assign and compute product costs

A processing department produces _____ units

Identical units Homogeneous units

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

Products are homogeneous

Characteristics of operation costing include

Products are processed in batches Costs are accumulated by department

Examples of products that may use operation costing include

Shoes Jewelry Clothing

Which of the following is a key difference between process and job-order costing?

Under process costing, it makes no sense to try to identify materials, labor and overhead costs with a particular customer order.

Equivalent units of production equals the number of units transferred to the next department (or finished goods) plus equivalent units in ending WIP under which method(s) of costing?

Weighted-average only

A processing department is an organization unit _____.

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

When using process costing, each processing department has a separate _____ _____ _____ account.

Work in process

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

Units in ______ work in process inventory + units started or transfered in = units in ______ work in process inventory + units completed and transfered out.

beginning ending

Direct labor plus manufacturing overhead equals _____ cost

conversion

Products most likely to use a process costing system include _____.

Gasoline Toothpaste Flour

The journal entry to record direct materials costs in processing Department #1 is debit:

Work in process-Department #1 and credit Raw Materials

The two most commonly used methods for determining unit product costs are _____-_____ costing and _____ costing.

Job-Order Process