acct chapter 4
examples of products that may use operation costing include
- shoes - jewelry - clothing
in process costing, manufacturing overhead costs are distributed to each department
according to the amount of the allocation base incurred in the department
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
when production is completed in the last processing department, units are transferred to
finished good
when using process costing, materials can be added
in any processing department
work is performed on products and materials, labor, and overhead costs are added to products in a
processing department
operations costing is similar to process costing because
labor and overhead costs are accumulated by operation or department
when using process costing, each processing department has a separate
work in process account
job-order costing is used for
many different products with unique production requirements
industries that convert raw materials into homogeneous products typically use
process costing
the equivalent units completed are valued the same as unit ________________ for purposes of determining the cost per unit
transferred out
characteristics of operation costing include
- costs are accumulated by department - products are processed in batches
processing department produces
- identical units - homogeneous units
weighted average method
combines costs and outputs from the current and prior periods
the journal entry to record material cost in the second department would include a _____ to Work in Process -Department 2
debit
the entry to record the sale of finished goods to customers is a
debit cost of goods sold credit finished goods
number of partially completed units x percentage completion
equivalent units
similarities between job-order costing and process costing include
- flow of costs through the manufacturing accounts - manufacturing accounts used - basic purpose to assign and compute product costs
when using process costing, which of the following can be added in any department
- materials - labor - overhead
differences between job-order and process costing include that process costing
- used for indistinguishable products - accumulates costs by department
process costing accumulates costs by
department
the difference om the treatment of costs transferred in from Department A to Department B when compared to materials and conversion costs is that costs transferred in
will always be 100% complete with respect to Department A
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
FIFO method
Bases costs solely on the costs and outputs from the current period
the journal entry to record the transfer of partially completed products from processing department #1 to #2 is to
Debit Work in Process #2 Credit Work in Process #1
the journal entry to record the transfer of completed units to the finished goods warehouse is to
Debit finished goods Credit work in process
the journal entry to apply overhead cost to processing Department #1 is to
Debit work in process Credit manufacturing overhead
conversion cost
direct labor plus manufacturing overhead