Deck 28: Process Cost Accounting

Question 1

The equivalent units of production are calculated on the Units of Production report.

Answer 1

False

Question 2

As percentage of completion is difficult to evaluate for manufacturing overhead costs, the percentage complete is ignored and considered immaterial.

Answer 2

False

Question 3

In the manufacturing overhead subsidiary ledger, a departmental cost sheet is set up for each production department and each service department.

Answer 3

True

Question 4

Materials issued to production are recorded by debiting Raw Materials Inventory and crediting the departmental work in process accounts.

Question 5

Under the average cost method, current period materials, labor and overhead added to production are added to the beginning inventory balance. The sum is then allocated between transferred out and costs remaining in ending work in process based on equivalent units of labor incurred.

Question 6

In a process cost accounting system, product costs are collected by department and transferred to the next department as units are completed. Assigning costs between transferred out units and units that remain in process is based on equivalent unit calculations.

Question 7

The entry to record the transfer of goods from Department A to Department B would include a debit to the Work in Process account for Department B.

Question 8

To calculate the unit cost of production for a year, the beginning inventory cost is added to the current period manufacturing costs, and the total is divided by the equivalent units of production.

Question 9

When the average cost method is used, units in beginning inventory which are 40 percent complete are multiplied by 60 percent to calculate equivalent units of production.

Question 10

Under the average cost method, the beginning inventory amount for each cost element is added to the amount of that cost element incurred during the current period.

Question 11

In a process cost accounting system, the average unit cost of a product is determined by dividing the total manufacturing cost incurred by the number of units placed in production during the period.

Question 12

At the end of the month, the balance in the Manufacturing Overhead control account is closed into the departmental work in process accounts.

Question 13

Equivalent units of production are determined for materials and labor but not for manufacturing overhead.

Question 14

Goods transferred to another department for further processing are considered 100 percent complete on the cost of production report for the department making the transfer.

Question 15

A cost of production report provides separate sections to summarize quantities and costs.

Question 16

The process costs associated with departmental inputs and outputs are reconciled on the Cost of Production report.

Question 17

Labor and manufacturing overhead costs are usually considered to be at the same stage of production.

Question 18

In a process cost accounting system, a separate Work in Process Inventory account is maintained for each producing department.

Question 19

The ending work in process inventory does not appear on the following month's cost of production report.

Question 20

On a cost of production report, the total of the costs of products transferred out of a department and the cost of the ending work in process still in the department must equal the cumulative total cost for the department.

Question 21

The data about costs, quantities, and equivalent units of production is assembled in a----------- .

Question 22

In the -----------accounting system, costs for materials, labor, and manufacturing overhead are charged to the Work in Process Inventory accounts of the production departments.

Question 23

To obtain meaningful unit costs in a process cost accounting system, the work completed must be measured in------------ units of production.

Question 24

At the end of the month, the transfer of manufacturing overhead to work in process includes a-----------to Manufacturing Overhead account

Question 25

During one month, 2,800 units of a product were completed and 900 units were 25 percent complete and still in process. The equivalent production for the month is

A)2,800 units.
B)3,025 units.
C)3,700 units.
D)3,475 units.

Question 26

On a cost of production report, the -----------total cost must equal the total costs accounted for.

Question 27

An ending work in process inventory of 600 units that are 45 percent complete is calculated as-----------equivalent units of production.

Question 28

A process cost accounting system may be viewed as a monthly----------- system.

Question 29

Costs of----------- departments are allocated as manufacturing overhead of the production departments that benefit.

Question 30

The units transferred in from a prior department are included in the quantity to be accounted for on the cost of production report for the receiving department.

Question 31

After closing the Manufacturing Overhead Applied account to Manufacturing Overhead it is determined that overhead has been underapplied. As a result, the Manufacturing Overhead account before closing will have a -----------balance.

Question 32

When finished goods are sold, the entry to record the cost of goods sold includes a----------- to the Cost of Goods Sold account.

Question 33

The ending balance of a(n)-----------Inventory account for a production department must agree with the amount shown for that department in the cost of production report.

Question 34

If 1,100 units were completed and transferred to the next department and ending work in process inventory consisted of 720 units that were 35 percent complete, the total equivalent units of production for the period is----------- .

Question 35

Equivalent units of production must be calculated separately for materials, labor, and-----------whenever the percentages of completion for the elements are different.

Question 36

A cost of production report usually contains a(n)-----------schedule and a cost schedule.

Question 37

The----------- summarizes all costs charged to each department as well as the costs transferred out and to the cost assigned to goods still in process.

Question 38

In the process cost accounting system, the -----------of the ending work in process is estimated.

Question 39

When the----------- method is used to calculate unit costs, the beginning inventory costs areadded to the current period costs, and the sum is divided by the equivalent units of production.

Question 40

Materials issued to production are recorded by----------- the departmental work in process accounts.

Question 41

McGill Manufacturing had 900 units in its work in process inventory at the beginning of a month, which were 40 percent were complete with respect to labor, and 100% complete with respect to materials, and overhead. The firm transferred 5,130 units to the finished goods inventory during the month and there were 680 units which were 35 percent complete and still in process at the end of the month. Equivalent production for the month was

A)4,910 units.
B)5,350 units.
C)5,368 units.
D)5,130 units.

Question 42

Simon Productions Company had a beginning work in process inventory totaling $7,200. During the current period, the company added materials costs of $15,680, labor cost of $13,500 and overhead of $20,100. Equivalent production was 12,000 units, and 9,000 units were completed and transferred to the finished goods inventory. Inventory costs would be determined using a unit cost (rounded to two decimal places)of

A)$18.83.
B)$6.28.
C)$4.11.
D)$4.71.

Question 43

The entry to transfer costs from Department A to Department B is recorded as

A)a debit to Finished Goods Inventory and a credit to Work in Process-Dept. A.
B)a debit to Work in Process-Dept. B and a credit to Work in Process-Dept. A.
C)a debit to Work in Process-Dept. A and a credit to Work in Process-Dept. B.
D)a debit to Work in Process-Dept. A and a credit to Finished Goods Inventory.

Question 44

Process cost accounting is most appropriate

A)when a company produces more than one product in batches rather than on a continuous basis.
B)when there is continuous production on a single product.
C)for companies with either continuous or batch processing of different products.
D)for all manufacturing companies.

Question 45

The Painting Department transferred 5,000 units to the finished goods storeroom during a month. There was no beginning work in process inventory, but 800 units were still in process at the end of the month, and were 65% complete. Production costs incurred for the month totaled $24,230. Inventory costs would be determined using a unit cost (rounded to two decimal places)of

A)$4.39.
B)$4.85.
C)$4.18.
D)$4.59.

Question 46

A department transferred 7,000 units to the finished goods storeroom during a month. There was no beginning work in process inventory, but 500 units were still in process at the end of the month. Equivalent production for the month was 7,400 units, and production costs incurred totaled
$23,960. Inventory costs would be determined using a unit cost (rounded to two decimal places)of

A)$3.03.
B)$3.24.
C)$3.19.
D)$3.37.

Question 47

A firm had a beginning work in process inventory totaling $4,900 and current period costs of $26,200. Equivalent production was 5,280 units, and 2,960 units were completed and transferred to the finished goods inventory. Inventory costs would be determined using a unit cost (rounded to two decimal places)of

A)$10.51.
B)$13.41.
C)$5.89.
D)$4.96.

Question 48

Equivalent production units may be computed

A)for labor only.
B)for labor and materials only.
C)for materials and manufacturing overhead only.
D)for labor, materials, and manufacturing overhead.

Question 49

On a cost of production report, beginning work in process

A)appears on the job cost sheet only.
B)is not included in the quantity accounted for.
C)is not included on the report.
D)is included in the quantity to be accounted for.

Question 50

A firm had 800 units in its work in process inventory at the beginning of a month. Of these units, 45 percent were complete with respect to labor, materials, and overhead. The firm transferred 5,700 units to the finished goods inventory during the month. It had 480 units which were 40 percent complete at the end of the month. Equivalent production for the month was

A)5,892 units.
B)5,700 units.
C)6,020 units.
D)5,380 units.

Question 51

In a process cost accounting system, the average unit cost of a product is determined by dividing the appropriate costs by

A)the number of units placed in production during the period.
B)In a process cost accounting system, the average unit .
C)the number of units transferred to another department.
D)the number of units transferred to the finished goods inventory.

Question 52

When finished goods are sold, the entry to record the cost of goods sold includes

A)a debit to Finished Goods Inventory and a credit to Cost of Goods Sold.
B)a debit to Cost of Goods Sold and a credit to Finished Goods Inventory.
C)a debit to Cost of Goods Sold and a credit to Sales.
D)a debit to Finished Goods Inventory and a credit to Sales.

Question 53

In a process cost accounting system,

A)the Work in Process Inventory accounts are used to accumulate the costs for labor, materials, and manufacturing overhead.
B)the Finished Goods Inventory account is debited for the cost of completed units any time during the month.
C)manufacturing overhead is not included in the determination of inventory costs.
D)inventory costs are calculated when goods are sold.

Question 54

Unit Manufacturing Company had no work in process at the beginning of a month. At the end of the month, 500 units were still in process which were 60% complete. Equivalent production for the month was 7,160 units. How many units were transferred out of production to finished goods during the month?

A)6,660 units.
B)6,960 units.
C)6,860 units.
D)7,160 units.

Question 55

Fraser Manufacturing had no work in process at the beginning of a month. It transferred 6,300 units to finished goods during the month, and 500 units were still in process at the end of the month. Equivalent production for the month was 6,620 units. At what stage of completion were the unfinished units at the end of the month?

A)36 percent
B)64 percent
C)95 percent
D)46 percent

Question 56

A firm had no work in process at the beginning of a month. It transferred 4,000 units to finished goods during the month, and 500 units were still in process at the end of the month. Equivalent production for the month was 4,400 units. At what stage of completion were the unfinished units at the end of the month?

A)67 percent
B)75 percent
C)20 percent
D)80 percent

Question 57

The Completion Department transferred 6,900 units to the finished goods storeroom during a month. There was no beginning work in process inventory, but 1,200 units were still in process at the end of the month which were 55% complete. Inventory unit cost at the end of the month were
$3)50. What were total production costs for the month?

A)$28,350.
B)$24,150.
C)$17,483.
D)$26,460.

Question 58

The ending Work in Process inventory in the mixing department contains 650 units that are 58% complete with respect to labor costs. How many equivalent units are in the ending inventory?

A)377 units.
B)650 units.
C)273 units.
D)560 units.

Question 59

The Finishing department began the period with 3,350 units of a product. During the month, Assembly completed and transferred-out 6,400 units to Finishing. Ending in process quantities and percentage completion for Assembly and Finishing are as follows: 400 units 35 percent complete and 560 units 20 percent complete, respectively. The equivalent production for Assembly and Finishing for the month is:

A)6,400 assembly and 3,350 finishing units.
B)6,540 assembly and 9,302 finishing units.
C)6,400 assembly and 9,750 finishing units.
D)6,800 assembly and 10,310 finishing units.

Question 60

The source of the cost data that appears in a cost of production report is

A)the Finished Goods Inventory account.
B)the Work in Process Inventory accounts.
C)the prior period income statement.
D)the job order cost sheet.

Question 61

The method that combines the cost of beginning inventory and the current costs of the period is the

A)market value process costing method.
B)method of net realizable value.
C)average method of process costing.
D)replacement cost method.

Question 62

During the month, 2,100 units of a product were completed and 1,200 units were two-thirds complete with respect material and one-third complete with respect to labor and overhead. After completing equivalent unit cost calculations, the company determined material cost was $3.52 and the combined labor and overhead cost was $6.80 per unit.

- What is the cost of the completed units?

A)$11,984.
B)$12,384.
C)$21,672.
D)$14,280.

Question 63

The current department costs categories are

A)work in process-beginning costs, started in production costs, and transferred in costs.
B)started in production costs, transferred in from prior department costs, and transferred out to next department costs.
C)work in process-beginning costs, transferred out to next department costs, and work in process-ending costs.
D)materials costs, labor costs, and manufacturing overhead costs.

Question 64

The activity for Noah Company's mixing department for August is given below. All material is add at the beginning of the process.
_Units Labor &


_Material Labor & Overhead %


-
Compute the cost of Noah's completed units.

A)$48,000.
B)$240,000.
C)$576,000.
D)$675,000.

Question 65

The part of the Cost Schedule showing the total and unit cost of each element and the cumulative cost total is the

A)costs to be accounted for.
B)costs accounted for.
C)total costs transferred out.
D)total work in process.

Question 66

Total costs accounted for consists of the

A)cumulative cost plus the work in process-ending costs.
B)total costs transferred out plus the total work in process-ending costs.
C)cumulative cost plus total costs transferred out.
D)total costs transferred out less the total work in process-ending costs.

Question 67

The activity for Noah Company's mixing department for August is given below. All material is add at the beginning of the process.
_Units Labor &


_Material Labor & Overhead %


-
Compute the cost of Noah's ending work in process inventory.

A)$49,000.
B)$50,000.
C)$89,000.
D)$99,000.

Question 68

The total accounted for consists of

A)the units started in production.
B)the units started and the units transferred out.
C)the units transferred out and the units in ending work in process.
D)the units transferred out and the units completed.

Question 69

During the month, 1,950 units of a product were completed and 900 units were two-thirds complete with respect to labor and are still in process. The total equivalent units of production for labor for the month is

A)2,850 units.
B)2,550 units.
C)1,950 units.
D)2,250 units.

Question 70

The activity for Noah Company's mixing department for August is given below. All material is add at the beginning of the process.
_Units Labor &


_Material Labor & Overhead %


-
Compute the total cost of a completed unit.

A)$12.50.
B)$12.60.
C)$11.64.
D)$12.00.

Question 71

During the month, 3,630 units of a product were completed and 1,800 units were two-thirds complete with respect to labor and are still in process. The total equivalent units of production for labor for the month is

A)4,830 units.
B)3,630 units.
C)5,430 units.
D)4,230 units.

Question 72

During the month, 2,450 units of a product were completed and 700 units were 60% complete with respect to labor and are still in process. The total equivalent units of production for labor for the month is

A)2,870 units.
B)2,450 units.
C)2,730 units.
D)3,150 units.

Question 73

Rounding is often necessary to make the Production Report cumulative cost total agree to the total costs accounted for. In the following periods, the amount of the adjustment is either added to or subtracted from the in work in process.

A)direct materials
B)direct labor
C)manufacturing overhead
D)credit entry

Question 74

During the month, 2,100 units of a product were completed and 1,200 units were two-thirds complete with respect material and one-third complete with respect to labor and overhead. After completing equivalent unit cost calculations, the company determined material cost was $3.52 per unit and the combined labor and overhead cost was $6.80 per unit.

- What is the cost of ending work in process?

A)$12,384.
B)$11,984.
C)$6,848.
D)$5,536.

Question 75

The headings for the columns of the Cost Schedule section of the Production Report when there is no beginning inventory are

A)Total Cost and E.P. Units.
B)Total Cost and Unit Cost.
C)E)P. Units and Unit Cost.
D)Total Cost, E.P. Units, and Unit Cost.

Question 76

The two sections of the cost of production report are

A)the summary of quantities and the summary of costs.
B)the costs assigned to the goods transferred out and the costs assigned to the goods still in process.
C)the total to be accounted for and the total accounted for.
D)beginning inventory plus goods started and goods transferred out and ending inventory.

Question 77

When beginning inventory is part of the production report, costs from the prior department are included. They are

A)the beginning inventory amount and the costs transferred in.
B)the beginning inventory amount.
C)the costs transferred in.
D)the beginning inventory costs transferred in.

Question 78

At the end of the month, the entry to close the Manufacturing Overhead control account is recorded as

A)a debit to Work in Process Inventory accounts and a credit to Manufacturing Overhead.
B)a debit to Manufacturing Overhead Applied and a credit to Manufacturing Overhead.
C)a debit to Manufacturing Overhead and a credit to the Work in Process inventory accounts.
D)a debit to Manufacturing Overhead and a credit to Manufacturing Summary.

Question 79

At the beginning of the current period, there were 900 units of product in a department, 30% completed; during the period 5,000 units were completed and transferred out and 800 units were still in process at the end of the period, 25% completed. The equivalent production units for the current period are

A)5,470 units.
B)5,800 units.
C)5,200 units.
D)6,700 units.

Question 80

Each section of the production report has two parts. They reconcile

A)the beginning inventory and the ending inventory.
B)the beginning inventory plus units started and the units started and completed and the ending inventory.
C)the costs in beginning work in process and the costs added during the period.
D)the total to be accounted for and the total accounted for.