Deck 3: The Accounting Information System

Question 1

In a process cost system, materials, labor and overhead are only added in the first production department.

Answer 1

False

Question 2

In a process cost system, total costs are determined at the end of a month or year.

Answer 2

True

Question 3

Equivalent units of production must be calculated before the unit production costs can be computed.

Answer 3

True

Question 4

The weighted-average method of computing equivalent units is the most widely used method in practice.

Question 5

The first step performed in preparing a production cost report is computing the equivalent units of production.

Question 6

Fewer materials requisitions are generally required in a process cost system than in a job order cost system.

Question 7

A company that produces motion pictures would likely use a process cost system.

Question 8

Process cost systems are used to apply costs to a specific job, such as the manufacturing of a specialized machine.

Question 9

The assignment of the three manufacturing cost elements to Work in Process in a process cost system is the same as in a job order cost system.

Question 10

A primary driver of overhead costs in continuous manufacturing operations is machine time used.

Question 11

Separate work in process accounts are maintained for each production department or manufacturing process in a process cost system.

Question 12

Equivalent units of production measure the work done during a period, expressed in fully completed units.

Question 13

In a process cost system, labor costs incurred may be captured on time tickets.

Question 14

Process cost accounting focuses on the process involved in mass-producing products that are very similar in nature.

Question 15

In a process cost system, costs are tracked through a series of connected manufacturing processes or departments, rather than by individual jobs.

Question 16

Equivalent units of production are used to determine the cost per unit of completed products.

Question 17

Equivalent units of production is the sum of units completed and transferred out plus equivalent units of beginning work in process.

Question 18

Unit material cost is computed by taking total material costs charged to the department for the period and dividing by the physical units in the process during the period.

Question 19

The physical units in a department are another name for the equivalent units of production.

Question 20

There are no units in process at the beginning of the period, 1,500 units in process at the end of the period that are 40% complete, and 15,000 units transferred out during the period.Based on this information, there were 14,400 equivalent units of production during the period.

Question 21

In order to compute the physical unit flow, a company must first compute unit production costs.

Question 22

When comparing the FIFO with the weighted-average method, the FIFO method provides current cost information.

Question 23

Production cost reports provide a basis for evaluating the productivity of a department.

Question 24

A production cost report is an internal document for management that shows production quantity and cost data for a particular job.

Question 25

Companies often use a combination of a process cost and a job order cost system, called operations costing.

Question 26

A process cost system would be used for all of the following products except

A)chemicals.
B)computer chips.
C)motion pictures.
D)soft drinks.

Question 27

Under the FIFO method, it is assumed that the beginning work in process is completed before new work is started.

Question 28

The total manufacturing cost per unit is used in costing the units completed and transferred during the period.

Question 29

In continuous process manufacturing, generally once the production begins, it continues until the finished product emerges.

Question 30

Companies using the weighted-average method do not complete units left over from the previous accounting periods, they start new units.

Question 31

One similarity of process cost accounting with job order cost accounting is that both determine total manufacturing costs after each job.

Question 32

When finished goods are sold, the entry to record the cost of goods sold is a debit to Finished Goods Inventory and a credit to Cost of Goods Sold.

Question 33

A process cost accounting system is most appropriate when

A)a variety of different products are produced, each one requiring different types of materials, labor, and overhead.
B)the focus of attention is on a particular job or order.
C)similar products are mass-produced.
D)individual products are custom made to the specification of customers.

Question 34

The flow of costs in a process costing system requires that materials be added in one department, labor added in another department and manufacturing overhead in a third department.

Question 35

There are no units in ending work in process at the end of the period under the FIFO method.

Question 36

When there is no beginning work in process and materials are entered at the beginning of the process, equivalent units of materials are the same as the units started into production.

Question 37

A characteristic of products that are mass-produced in a continuous fashion is that

A)the products are identical or very similar in nature.
B)they are grouped in batches.
C)they are produced at the time an order is received.
D)their costs are accumulated on job cost sheets.

Question 38

When equivalent units of production are different for materials and conversion costs, unit costs are computed for materials, conversion, and total manufacturing.

Question 39

The FIFO method is easier to understand and use than the weighted-average method.

Question 40

The FIFO method is conceptually superior to the weighted-average method.

Question 41

Equivalent units are calculated by

A)multiplying the percentage of work done by the equivalent units of output.
B)dividing physical units by the percentage of work done.
C)multiplying the percentage of work done by the physical units.
D)dividing equivalent units by the percentage of work done.

Question 42

A product requires processing in two departments, the Baking Department and then the Packaging Department, before it is completed.Costs transferred out of the Baking Department will be transferred to:

A)Finished Goods Inventory.
B)Cost of Goods Sold.
C)Work in Process-Packaging Department.
D)Manufacturing Overhead.

Question 43

Price Company assigns overhead based on machine hours.The Milling Department logs 2,400 machine hours and Cutting Department shows 4,000 machine hours for the period.If the overhead rate is $5 per machine hour, the entry to assign overhead will show a

A)debit to Manufacturing Overhead for $32,000.
B)credit to Work in Process-Cutting Department for $20,000.
C)debit to Work in Process for $20,000.
D)credit to Manufacturing Overhead for $32,000.

Question 44

Which of the following manufacturing cost elements occurs in a process cost system?

A)Direct materials.
B)Direct labor.
C)Manufacturing overhead.
D)All of these.

Question 45

In a process cost system,

A)a Work in Process account is maintained for each product.
B)a materials requisition must identify the job on which the materials will be used.
C)a Work in Process account is maintained for each process.
D)one Work in Process account is maintained for all the processes, similar to a job order cost system.

Question 46

A primary driver of overhead costs in continuous manufacturing operations is:

A)direct labor dollars.
B)direct labor hours.
C)machine hours.
D)machine maintenance dollars.

Question 47

When manufacturing overhead costs are assigned to production in a process cost system, they are debited to

A)the Finished Goods Inventory account.
B)Cost of Goods Sold.
C)a Manufacturing Overhead account.
D)a Work in Process account.

Question 48

Which of the following is a true statement about process cost systems?

A)In process cost systems, costs are accumulated but not assigned.
B)A process cost system has one work in process account for each process.
C)In process cost systems, costs are summarized on job cost sheets.
D)Unit costs are not computed in process cost systems.

Question 49

A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process.For the month of January, there were no units in the beginning work in process inventory; 90,000 units were started into production in January; and there were 20,000 units that were 40% complete in the ending work in process inventory at the end of January.What were the equivalent units of production for conversion costs for the month of January?

A)70,000 equivalent units.
B)82,000 equivalent units.
C)78,000 equivalent units.
D)90,000 equivalent units.

Question 50

Which of the following is correct regarding cost systems?

Question 51

In process cost accounting, manufacturing costs are summarized on a

A)job order cost sheet.
B)process order cost sheet.
C)production cost report.
D)manufacturing cost sheet.

Question 52

Which of the following would not appear as a debit in the Work in Process account of a second department in a two stage production process?

A)Materials used.
B)Overhead applied.
C)Labor assigned.
D)Cost of products transferred out.

Question 53

Which of these best reflects a distinguishing factor between a job order cost system and a process cost system?

A)The detail at which costs are calculated.
B)The time period each covers.
C)The number of work in process accounts.
D)The manufacturing cost elements included.

Question 54

Materials requisitions are:

A)not used in process costing.
B)generally used more frequently in process costing than job order costing.
C)generally used less frequently in process costing than job order costing.
D)used more frequently by latter stage production departments.

Question 55

In a process cost system, product costs are summarized:

A)on job cost sheets.
B)on production cost reports.
C)after each unit is produced.
D)when the products are sold.

Question 56

A process with no beginning work in process, completed and transferred out 85,000 units during a period and had 50,000 units in the ending work in process inventory that were 30% complete.The equivalent units of production for the period were:

A)85,000 equivalent units.
B)135,000 equivalent units.
C)100,000 equivalent units.
D)70,000 equivalent units.

Question 57

Barnes and Miller Manufacturing is trying to determine the equivalent units for conversion costs with 10,000 units of ending work in process at 80% completion and 32,000 physical units.There are no beginning units in the department.Conversion costs occur evenly throughout the entire production period.What are the equivalent units for conversion costs for the current period?

A)42,000.
B)40,000.
C)8,000.
D)30,000.

Question 58

A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process.For the month of January, there were no units in the beginning work in process inventory; 90,000 units were started into production in January; and there were 20,000 units that were 40% complete in the ending work in process inventory at the end of January.What were the equivalent units of production for materials for the month of January?

A)98,000 equivalent units.
B)82,000 equivalent units.
C)70,000 equivalent units.
D)90,000 equivalent units.

Question 59

Differences between a job order cost system and a process cost system include all of the following except the

A)documents used to track costs.
B)point at which costs are totaled.
C)unit cost computations.
D)flow of costs.

Question 60

In a process cost system, unit costs are determined using a

A)numerator of costs of each job.
B)denominator of units produced during the period.
C)denominator of units produced for the job.
D)denominator of units produced for the day.

Question 61

Crawford Company has the following equivalent units for July: materials 20,000 and conversion costs 18,000.Production cost data are:

Question 62

Cohen Company is trying to determine the equivalent units for conversion costs with 5,000 units of ending work in process at 80% completion and 45,000 units that are 100% complete as to materials.There are no beginning units in the department.Materials are added at the beginning of the process, and conversion costs occur evenly throughout the entire production period.What is the equivalent units of production for conversion costs for the current period?

A)50,000.
B)49,000.
C)4,000.
D)44,000.

Question 63

The Molding Department of Boswell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 730,000 units, completed and transferred out 690,000 units, and ending work in process 80,000 units (40% complete).Assuming materials are entered at the beginning of the process, equivalent units for materials are:

A)770,000.
B)650,000.
C)690,000.
D)810,000.

Question 64

Gantner Company had the following department information about physical units and percentage of completion: $$\begin{array} { l c } & \text { Physical Units } \\\text { Work in process, May } 1(60 \%) & 60,000 \\\text { Completed and transferred out } & 180,000 \\\text { Work in process, May } 31(40 \%) & 50,000\end{array}$$ If materials are added at the beginning of the production process, what is the total number of equivalent units for materials during May?

A)240,000.
B)230,000.
C)224,000.
D)200,000.

Question 65

In Moyer Company, the Cutting Department had beginning work in process of 6,000 units, transferred out 24,000 units, and had an ending work in process of 3,000 units.How many units were started by Moyer during the month?

A)18,000.
B)21,000.
C)24,000.
D)27,000.

Question 66

The Molding Department of Kennett Company has the following production data: beginning work in process 25,000 units (60% complete), started into production 475,000 units, completed and transferred out 450,000 units, and ending work in process 50,000 units (40% complete).Assuming materials are entered at the beginning of the process, equivalent units for materials are:

A)500,000.
B)425,000.
C)450,000.
D)525,000.

Question 67

In the month of June, a department had 20,000 units in beginning work in process that were 70% complete.During June, 90,000 units were transferred into production from another department.At the end of June there were 10,000 units in ending work in process that were 40% complete.Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process.The equivalent units of production for materials for June were

A)100,000 equivalent units.
B)110,000 equivalent units.
C)114,000 equivalent units.
D)90,000 equivalent units.

Question 68

Hanker Company had the following department data on physical units: $\begin{array}{lr}\text { Work in process, beginning } & 3,000 \\\text { Completed and transferred out } & 18,000 \\\text { Work in process, ending } & 2,400\end{array}$ Materials are added at the beginning of the process.What is the total number of equivalent units for materials during the period?

A)18,600.
B)2,400.
C)20,400.
D)15,000.

Question 69

In the month of June, a department had 20,000 units in beginning work in process that were 70% complete.During June, 90,000 units were transferred into production from another department.At the end of June there were 10,000 units in ending work in process that were 40% complete.Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process.The equivalent units of production for conversion costs for June were

A)90,000 equivalent units.
B)104,000 equivalent units.
C)100,000 equivalent units.
D)110,000 equivalent units.

Question 70

If beginning work in process is 4,000 units, ending work in process is 2,000 units, and the units accounted for equals 15,000 units, what must units started into production be?

A)19,000.
B)17,000.
C)11,000.
D)13,000.

Question 71

A process with 1,600 units of beginning work in process, completed and transferred out 25,000 units during a period.There were 10,000 units in the ending work in process that were 50% complete as to conversion costs.Materials are added 80% at the beginning of the process and 20% when the units are 90% complete.How much is equivalent units of production for the period for material costs?

A)29,000 equivalent units.
B)35,000 equivalent units.
C)27,000 equivalent units.
D)33,000 equivalent units.

Question 72

In the month of June, a department had 20,000 units in beginning work in process that were 70% complete.During June, 90,000 units were transferred into production from another department.At the end of June there were 10,000 units in ending work in process that were 40% complete.Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process.How many units were transferred out of the process in June?

A)90,000 units.
B)80,000 units.
C)100,000 units.
D)110,000 units.

Question 73

Minor Company had the following department data: $\begin{array}{lr}&\text { Physical Units }\\\text { Work in process, July } 1 & 30,000 \\\text { Completed and transferred out } & 165,000 \\\text { Work in process. July } 31 & 45,000\end{array}$ Materials are added at the beginning of the process.What is the total number of equivalent units for materials in July?

A)165,000.
B)180,000.
C)240,000.
D)210,000.

Question 74

It is necessary to calculate equivalent units of production in a department because

A)a physical count of units is impossible.
B)some units worked on in the department are not fully complete.
C)the physical units in the department are always 100% complete.
D)at times a department may use a job order cost system and then switch to a process cost system.

Question 75

The Molding Department of Boswell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 730,000 units, completed and transferred out 690,000 units, and ending work in process 80,000 units (40% complete).Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are:

A)770,000.
B)810,000.
C)722,000.
D)650,000.

Question 76

Corsi Company had the following department data: $$\begin{array} { l c } & \text { Physical Units } \\\text { Work in process, beginning } & -0- \\\text { Completed and transferred out } & 90,000 \\\text { Work in process, ending } & 7,000\end{array}$$ Materials are added at the beginning of the process.What is the total number of equivalent units for materials during the period?

A)90,000.
B)9,000.
C)97,000.
D)83,000.

Question 77

Gloria Company had no beginning work in process.During the period, 16,000 units were completed, and there were 1,200 units of ending work in process.How many units were started into production?

A)17,200.
B)16,000.
C)14,800.
D)1,200.

Question 78

The Molding Department of Kennett Company has the following production data: beginning work in process 25,000 units (60% complete), started into production 475,000 units, completed and transferred out 450,000 units, and ending work in process 50,000 units (40% complete).Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are:

A)500,000.
B)455,000.
C)470,000.
D)450,000.

Question 79

A process with no beginning work in process, completed and transferred out 35,000 units during a period and had 14,000 units in the ending work in process that were 50% complete. How much is equivalent units of production for the period for conversion costs?

A)42,000 equivalent units.
B)49,000 equivalent units.
C)56,000 equivalent units.
D)28,000 equivalent units.

Question 80

Super-Tech Industries had the following department information about physical units and percentage of completion: $$\begin{array} { l c } & \text { Physical Units } \\\text { Work in process, June } 1(75 \%) & 8,000 \\\text { Completed and transferred out } & 22,000 \\\text { Work in process, June } 30(50 \%) & 12,000\end{array}$$ If materials are added at the beginning of the production process, what is the total number of equivalent units for materials during June?

A)19,000.
B)34,000.
C)36,000.
D)28,000.