Chapter 5 accounting smart book

1. flour 2. sunscreen 3. paper towels

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

True

True or false: A processing department needs to calculate a separate unit cost for each type of cost incurred.

according to the amount of the allocation base incurred in the department

In process costing, manufacturing overhead costs are distributed to each department _________.

credit and debit

The journal entry to record labor cost in the first department is ________ Wages payable and ________ Work in process-Department #1

debit

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

Processing

Work is performed on products, and materials, labor, or overhead costs are added to products in a _________ department

2040

A processing department transferred 2,000 units to the next department. Ending work in process in the department contained 100 units that were 40% complete with regard to materials and 25% complete with regard to conversion costs. Using the weighted-average method, the equivalent units of production for materials is ______.

4,290

A company's beginning work in process contained 200 units that were 20% complete. Those units were completed and transferred to finished goods. During the period 4,300 units were started. Of the units started, 4,000 were transferred to finished goods. The 300 units in ending work in process were 30% complete. Using the weighted-average method, the equivalent units of production equals ______.

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

A processing department is an organization unit __________.

Is used for indistinguishable products and accumulates costs by department

Differences between job-order and process costing include that process costing?

conversion

Direct labor plus manufacturing overhead equals __________ cost

Weighted-average only

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?

equivalent units in ending work in process plus units transferred out.

Equivalent units of production under the weighted-average method equals?

weighted-average and FIFO

Methods to calculate departmental unit costs include ____________.

340

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

operation

When products have both similar and individual characteristics, _________ costing is used.

transferred in

When unit costs are transferred from Department A to Department B, Department B will treat the costs as ______.

Work in process

When using process costing, each processing department has a separate ________ _________ __________ account

Products are homogeneous.

Which of the following is not a characteristic of operation costing? 1. Products are processed in batches. 2. Costs are accumulated by department. 3. Products are homogeneous. 4. Costs are accumulated by operation

FIFO method

Bases costs solely on the costs and outputs from the current period.

$34.60

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 ______.

products are processed in batches and costs are accumulated by department

Characteristics of operation costing include ______.

Weighted-average method

Combines costs and outputs from the current and prior periods.

6

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 $ _________

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

Costs per equivalent unit are used to value _________.

will always be 100% complete with respect to Department A

Costs transferred in from Department A to Department B ____________.

generally applied using a predetermined overhead rate

In process costing, manufacturing overhead costs are ____________.

process

Industries that convert raw materials into homogeneous products typically use __________ costing

equivalent

Number of partially completed units x Percentage completion of those units with respect to the processing in the department = ___________ units

Department

Process costing accumulates costs by?

work in process

Recording the transfer of partially completed products from one processing department to another, requires a journal entry that affects the ______ account of both processing departments.

Work in process

Recording the transfer of partially completed products from one processing department to another, requires a journal entry that affects the __________ account of both processing departments.

1. flow of costs through the manufacturing accounts 2. basic purpose to assign and compute product costs 3. manufacturing accounts used

Similarities between job-order costing and process costing include?

beginning

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.

equivalent

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

True

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

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

Which of the following is a key difference between process and job-order costing? 1. Job-order costing is used for indistinguishable products, and process costing is used for different jobs that have unique production requirements. 2. Under process costing, it makes no sense to try to identify materials, labor and overhead costs with a particular customer order. 3. Process costing accumulates costs by order, and job-order costing accumulates costs by department. 4. Job-order costing systems compute unit costs by department, and process costing systems compute unit costs by job.

#2 and credit Work in Process-Department #1

The journal entry to record the transfer of partially completed products from processing Department #1 to processing Department #2 is to debit Work in Process Department ____ and?

credit and debit

The correct journal entry to apply manufacturing costs to processing Department #1 is ________ Manufacturing overhead and _______ Work in process-Department #1.

transferred out

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

(Cost of beginning work in process inventory + Cost added during the period) ÷ Equivalent units of production

The formula for the cost per equivalent unit using the weighted-average method is __________.

Work in Process-Department #1 and credit Raw Materials

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