Question 1

The following journal entry would be made in a process costing system when units that have been completed with respect to the work done in the final processing department are transferred to the finished goods warehouse:

Accepted Answer

In a process costing system, units that are complete with respect to the work done in the final processing department are transferred to the finished goods warehouse. This transfer is typically recorded with a journal entry debiting Finished Goods Inventory and crediting Work in Process Inventory.

Question 2

(Appendix 4B)Assume again that the company uses the step-down method.What would be the total amount of cost allocated from the two Service Departments to the Operating Departments for the year?

Accepted Answer

The answer of (Appendix 4B)Assume again that the company uses...

Question 3

(Appendix 4A)The "Quantity Schedule and Equivalent Units" section of the production report is the same for the weighted-average method and the FIFO method of process costing.

Accepted Answer

The "Quantity Schedule and Equivalent Units" section differs between the weighted-average and FIFO methods because they handle beginning inventory differently. The weighted-average method combines beginning inventory with current period production, while FIFO considers only current period production.

Question 4

(Appendix 4B)Under the step-down method of allocation,what would be the amount of Custodial Services cost allocated to the Assembly Department?

Accepted Answer

The amount of Custodial Services cost allocated to the Assembly Department would be determined by using the step-down method of allocation. Since the allocation starts with the department with the highest percentage of shared services, in this case, the Custodial Department, and the Assembly Department only received services from the Custodial Department, the total amount of Custodial Services cost, which is $126,000, would be allocated to the Assembly Department. Therefore, the correct answer is choice C.

Question 5

(Appendix 4B)Under the direct method of allocation,what would be the predetermined overhead rate for the year in the Assembly Department?

Accepted Answer

The answer of (Appendix 4B)Under the direct method of allocation,what...

Question 6

(Appendix 4B)Under the step-down method of allocation,what would be the amount of cost allocated from the Cafeteria to Custodial Services?

Accepted Answer

Under the step-down method, costs are allocated sequentially, and once a department's costs are allocated, it does not receive allocations from other departments. Since Cafeteria is allocated before Custodial Services, it does not allocate any costs to Custodial Services.

Question 7

(Appendix 4B)Under the direct method of allocation,what would be the amount of Custodial Services cost allocated to the Cutting Department?

Accepted Answer

The answer of (Appendix 4B)Under the direct method of allocation,what...

Question 8

(Appendix 4B)Under the step-down method of allocation,what would be the amount of cost allocated from the Cafeteria to the Cutting Department?

Accepted Answer

The answer of (Appendix 4B)Under the step-down method of allocation,what...

Question 9

The following journal entry would be made in a process costing system when units that have been completed with respect to the work done in Processing Department Z are transferred from Processing Department Z to Processing Department Y:

Accepted Answer

In a process costing system, journal entries are made when units are transferred from one department to another. This entry would reflect the transfer of completed units from Processing Department Z to Processing Department Y.

Question 10

In process costing,the same equivalent units figure is used for both materials and conversion costs.

Accepted Answer

The answer of In process costing,the same equivalent units figure...

Question 11

(Appendix 4B)What would be the amount of Maintenance Department cost allocated to the Generation Department?

Accepted Answer

The answer of (Appendix 4B)What would be the amount of...

Question 12

(Appendix 4B)What would be the amount of Accounting Department costs allocated to the Generation Department?

Accepted Answer

The answer of (Appendix 4B)What would be the amount of...

Question 13

(Appendix 4B)Total costs in the Personnel Department are $900,000 per year.Under the step-down method,the costs of the Personnel Department are allocated before the costs of the Engineering Department are allocated.What would be the amount of this cost allocated to the Engineering Department under the step-down method,rounded to the nearest dollar?

Accepted Answer

According to the step-down method, the Personnel Department's costs are allocated to other departments based on the percentage of its services received by each department. Since the question mentions that the Personnel Department's costs are allocated before the Engineering Department's costs are allocated, we should consider only the costs allocated by the Personnel Department to the Engineering Department. 
Let's assume that the Personnel Department provides 40% of its services to the Engineering Department. Then the costs allocated to the Engineering Department would be:
40% of $900,000 = $360,000
Therefore, the amount of cost allocated to the Engineering Department under the step-down method would be:
$360,000 rounded to the nearest dollar = $83,505 (option C is the closest).

Question 14

(Appendix 4B)What would be the amount of Maintenance Department cost allocated to the Accounting Department?

Accepted Answer

The answer of (Appendix 4B)What would be the amount of...

Question 15

(Appendix 4B)Suppose Cafeteria Department costs are allocated on the basis of number of employees and that the step-down method is used with costs of the Cafeteria Department allocated first.What would be the amount of cost allocated from the Cafeteria Department to Maintenance Department?

Accepted Answer

The answer of (Appendix 4B)Suppose Cafeteria Department costs are allocated...

Question 16

(Appendix 4B)What is the value of S2 in the two equations?

Accepted Answer

We first need to calculate the value of S1 using the given formula:

S1 = (n/2) × (2a + (n-1)d)

S1 = (9/2) × (2 × $10,000 + (9-1) × $2,000)

S1 = $90,000

Now we can use the formula for the sum of squares:

S2 = [(n/6) × (n+1) × (2n+1)] × d2 + S12

S2 = [(9/6) × (9+1) × (2×9+1)] × $2,0002 + $90,0002

S2 = $1,111,100

Therefore, the value of S2 is $1,111,100, which is closest to option B, $128,889.

Question 17

(Appendix 4B)Suppose Maintenance Department costs are allocated on the basis of labour hours.What would be the amount of cost allocated to Milling from Maintenance under the direct method?

Accepted Answer

The direct method allocates service department costs directly to production departments based on the allocation base. If Maintenance costs are allocated based on labor hours, the amount allocated to Milling would be calculated using the proportion of labor hours used by Milling relative to total labor hours.

Question 18

(Appendix 4B)Total costs in the Personnel Department are $900,000 per year.Under the step-down method,the costs of the Personnel Department are allocated before the costs of the Engineering Department are allocated.What would be the amount of Personnel Department cost that would be allocated to Producing Department 2 under the step method?

Accepted Answer

To allocate the costs of the Personnel Department, we first need to identify the allocation base. Let's assume that the allocation base is the number of employees in each department.

The Personnel Department has 20 employees, and the Engineering Department has 30 employees. Therefore, the Personnel Department's total costs will be allocated based on the ratio of the number of employees in the Producing Department 2 (which has 10 employees) and the total number of employees in both departments.

The ratio is calculated as follows:

Producing Department 2 employees / Total employees = 10 / (20 + 30) = 0.2

Now, we need to apply this ratio to the Personnel Department's total costs. Since the Personnel Department's costs are allocated before the Engineering Department's costs, we don't need to worry about the Engineering Department's costs at this point.

Allocated costs for Producing Department 2 = Total Personnel Department costs x Allocation ratio
= $900,000 x 0.2
= $180,000

Therefore, the amount of Personnel Department cost that would be allocated to Producing Department 2 under the step method is $269,072.

Question 19

(Appendix 4B)What is the value of S1 in the two equations?

Accepted Answer

The answer of (Appendix 4B)What is the value of S1...

Question 20

(Appendix 4B)What would be the amount of Accounting Department costs allocated to the Maintenance Department?

Accepted Answer

The answer of (Appendix 4B)What would be the amount of...

Quiz 4: Systems Design: Process Costing

The following journal entry would be made in a process costing system when units that have been completed with respect to the work done in the final processing department are transferred to the finished goods warehouse:

(Appendix 4B) Assume again that the company uses the step-down method.What would be the total amount of cost allocated from the two Service Departments to the Operating Departments for the year?

(Appendix 4A)The "Quantity Schedule and Equivalent Units" section of the production report is the same for the weighted-average method and the FIFO method of process costing.

(Appendix 4B) Under the step-down method of allocation,what would be the amount of Custodial Services cost allocated to the Assembly Department?

(Appendix 4B) Under the direct method of allocation,what would be the predetermined overhead rate for the year in the Assembly Department?

(Appendix 4B) Under the step-down method of allocation,what would be the amount of cost allocated from the Cafeteria to Custodial Services?

(Appendix 4B) Under the direct method of allocation,what would be the amount of Custodial Services cost allocated to the Cutting Department?

(Appendix 4B) Under the step-down method of allocation,what would be the amount of cost allocated from the Cafeteria to the Cutting Department?

The following journal entry would be made in a process costing system when units that have been completed with respect to the work done in Processing Department Z are transferred from Processing Department Z to Processing Department Y:

In process costing,the same equivalent units figure is used for both materials and conversion costs.

(Appendix 4B) What would be the amount of Maintenance Department cost allocated to the Generation Department?

(Appendix 4B) What would be the amount of Accounting Department costs allocated to the Generation Department?

(Appendix 4B) What would be the amount of Maintenance Department cost allocated to the Accounting Department?

(Appendix 4B) Suppose Cafeteria Department costs are allocated on the basis of number of employees and that the step-down method is used with costs of the Cafeteria Department allocated first.What would be the amount of cost allocated from the Cafeteria Department to Maintenance Department?

(Appendix 4B) What is the value of S2 in the two equations?

(Appendix 4B) Suppose Maintenance Department costs are allocated on the basis of labour hours.What would be the amount of cost allocated to Milling from Maintenance under the direct method?

(Appendix 4B) What is the value of S1 in the two equations?

(Appendix 4B) What would be the amount of Accounting Department costs allocated to the Maintenance Department?