quiz 4
Assume there was no beginning work in process inventory and the ending work in process inventory is 70% complete with respect to conversion costs. Under the weighted-average method, the number of equivalent units of production with respect to conversion costs would be:
less than the units started during the period.
In process costing, the equivalent units computed for materials is generally the same as that computed for conversion costs.
false
Process costing is employed in industries that produce basically homogeneous products such as bricks, flour, or cement but would not be appropriate for assembly-type operations such as those that manufacture computers.
false
The cost reconciliation report has two sections: "Costs to be accounted for" followed by "Costs accounted for". The "Costs accounted for" portion of the cost reconciliation report includes the cost of ending work in process inventory and the cost of beginning work in process inventory.
false
The following journal entry would be made in a processing costing system when units that have been completed in the final processing department are transferred to the finished goods warehouse: Debit Credit Finished Goods XXX Materials XXX
false
When materials are purchased in a process costing system, a work in process account is debited with the cost of the materials.
false
All of the following statements are correct when referring to process costing except:
Process costing would be appropriate for a jeweler who makes custom jewelry to order.
In process costing, a separate work in process account is kept for each:
processing department.
Which of the following types of companies would typically use process costing rather than job-order costing?
A breakfast cereal manufacturer.
In a process costing system, costs are traced directly to jobs.
false
When all materials are added at the beginning of the production process, under a weighted-average process costing system the equivalent units for materials is equal to the units completed and transferred out.
false
When computing the cost per equivalent unit, it is necessary to consider the percentage completion of the units in beginning inventory under the weighted-average method.
false
Malcolm Company uses a weighted-average process costing system. All materials at Malcolm are added at the beginning of the production process. The equivalent units for materials at Malcolm would be the sum of:
units in beginning work in process and the units started.
A process costing system is employed in those situations where:
where manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis.
In a process costing system, manufacturing overhead cost is also called conversion cost.
false
In a process costing system, overhead is allocated to departments after being applied to units of product.
false
The cost reconciliation report has two sections: "Costs to be accounted for" followed by "Costs accounted for". The "Costs accounted for" portion of the cost reconciliation report includes the cost of beginning work in process inventory and the cost of units transferred out.
false
The cost reconciliation report has two sections: "Costs to be accounted for" followed by "Costs accounted for". The "Costs accounted for" portion of the cost reconciliation report includes the cost of beginning work in process inventory and the costs added during the period.
false
The equivalent units in beginning work in process inventory plus the equivalent units in ending work in process inventory equals the units transferred out plus the equivalent units for the work done during the period.
false
Under the weighted-average method, the cost of ending work in process inventory is determined by dividing the equivalent units of production for ending inventory by the cost per equivalent unit for each cost category and then summing the result.
false
A flour manufacturer is more likely to use process costing than job-order costing whereas a manufacturer of customized leather jackets is more likely to use job-order costing than process costing.
true
In calculating cost per equivalent unit under the weighted-average method, prior period costs are combined with current period costs.
true
Job-order costing would be more likely to be used than process costing in situations where many different products or services are produced each period to customer specifications.
true
The units in beginning work in process inventory plus the units started into production must equal the units transferred out of the department plus the units in ending work in process inventory.
true
In the cost reconciliation report under the weighted-average method, the "Costs to be accounted for" section contains which of the following items?
Cost of beginning work in process inventory
In the cost reconciliation report under the weighted-average method, the "Total cost accounted for" equals:
Cost of ending work in process inventory + Cost of units transferred out
Which of the following journal entries would be used to record direct labor costs in a company having two processing departments (Department A and Department B)?
Debit Credit Work in Process-Department A XXX Work in Process-Department B XXX Salaries and Wages Payable XXX
Under the weighted-average method, the cost of units transferred out of a department is computed as follows for a cost category:
Units transferred to the next department × Cost per equivalent unit
When computing the cost per equivalent unit, the weighted-average method of process costing considers:
costs incurred during the current period plus cost of beginning work in process inventory.
A job-order costing system would be best suited for production of a large quantity of a homogeneous product.
false
