Question 1

If Department Q uses $60,000 of direct materials and Department T uses $15,000 of direct materials,the following journal entry would be recorded by the process cost accounting system:
Goods in Process Inventory,Department Q 60,000
Goods in Process Inventory,Department T 15,000
Raw Materials Inventory 75,000

Accepted Answer

A) True 
 B)False

Question 2

In some circumstances,a process cost accounting system can classify wages paid to maintenance workers as direct labor costs instead of factory overhead.

Accepted Answer

A) True 
 B)False  True

Question 3

When raw materials are purchased on account for use in a process costing system,the corresponding journal entry that should be recorded will include:

Accepted Answer

A)  A debit to Goods in Process Inventory.
B)  A debit to Accounts Payable.
C)  A credit to Cash.
D)  A debit to Raw Materials Inventory.
E)  A credit to Raw Materials Inventory.F) C) and D)
G) A) and B)

Question 4

The process cost summary is an important managerial accounting report produced by a process cost accounting system.

Accepted Answer

A) True 
 B)False

Question 5

In a process cost accounting system,factory overhead costs can be allocated to production departments by using a predetermined overhead allocation rate.

Accepted Answer

A) True 
 B)False

Question 6

Process costing is applied to operations with repetitive production and heterogeneous products.

Accepted Answer

A) True 
 B)False

Question 7

In process costing there is never a balance remaining in Factory Overhead that needs to be closed at period end.

Accepted Answer

A) True 
 B)False

Question 8

In process cost accounting,all labor that is applied exclusively in a single production department is considered to be direct labor.

Accepted Answer

A) True 
 B)False

Question 9

Equivalent units of production refer to the number of units that would be completed if all effort during a period had been applied only to those units that were started and completed in a period.

Accepted Answer

A) True 
 B)False

Question 10

Hou Company applies factory overhead to its production departments on the basis of 90% of direct labor costs.In the Assembly Department,Hou had $125,000 of direct labor cost,and in the Finishing Department,Hou had $35,000 of direct labor cost.The entry to apply overhead to these production departments is:

Accepted Answer

A)  Debit Factory Overhead - Assembly $112,500; debit Factory Overhead - Finishing $31,500; credit Goods in Process Inventory $144,000.
B)  Debit Factory Overhead $144,000; credit Goods in Process Inventory - Assembly $112,500; credit Goods in Process - Finishing $31,500.
C)  Debit Factory Overhead $144,000; credit Factory Payroll $144,000.
D)  Debit Goods in Process Inventory - Assembly $112,500; debit Goods in Process Inventory - Finishing $31,500; credit Factory Overhead $144,000.
E)  Debit Factory Payroll $144,000; credit Cash $144,000.F) C) and D)
G) None of the above

Question 11

Which of the following statements is most accurate?

Accepted Answer

A)  In process costing, estimating the degree of completion of units is usually more accurate for conversion costs than for direct materials.
B)  The weighted average method uses the stage of completion of the current period's beginning goods in process inventory account in calculating equivalent units.
C)  The weighted average method focuses on the total costs and total equivalent units completed to date; this is the major difference between the weighted average method and the FIFO method of calculating equivalent units of production.
D)  The FIFO method of calculating equivalent units of production merges the work and the costs of the beginning inventory with the work and the costs done during the current period.
E)  It is not possible for there to be a significant difference between the cost of completed units between the weighted average and the FIFO methods.F) A) and B)
G) D) and E)

Question 12

Prepare general journal entries to record the following production activities for Sherman Manufacturing.
a.Purchased $82,000 of raw materials on credit.
b.Used $63,500 of direct materials in production.
c.Used $12,800 of indirect materials.

Accepted Answer

The answer of Prepare general journal entries to record the...

Question 13

In a process costing system,factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

Accepted Answer

A) True 
 B)False

Question 14

Equivalent units of production are always the same as the total number of physical units finished during the period.

Accepted Answer

A) True 
 B)False

Question 15

Direct labor and indirect labor are recorded,respectively,to:

Accepted Answer

A)  Factory Overhead and Goods in Process Inventory.
B)  Goods in Process Inventory and Finished Goods Inventory.
C)  Finished Goods Inventory and Goods in Process Inventory.
D)  Goods in Process Inventory and Factory Overhead.
E)  Cost of Goods Sold and Finished Goods Inventory.F) A) and B)
G) A) and C)

Question 16

If a department that applies process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to direct labor,it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them.

Accepted Answer

A) True 
 B)False  False

Question 17

A process cost summary includes the amounts of equivalent units of production for the period.

Accepted Answer

A) True 
 B)False

Question 18

In process cost accounting,the classification of materials as direct or indirect depends on whether they are clearly linked with a specific process.

Accepted Answer

A) True 
 B)False  True

Question 19

During March,the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods.Of the units transferred,25,000 were in process at the beginning of March and 110,000 were started and completed in March.March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor.At the end of March,30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor.The production department incurred direct materials cost of $253,000 and its beginning inventory included materials cost of $93,500.Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

Accepted Answer

A)  $1.53.
B)  $2.48.
C)  $2.10.
D)  $2.57.
E)  $2.40.F) A) and C)
G) A) and E)

Question 20

In a process cost accounting system,direct material costs incurred are recorded:

Accepted Answer

A)  Indirectly to a Goods in Process Inventory account.
B)  Indirectly to a Finished Goods Inventory account.
C)  Directly to a Goods in Process Inventory account.
D)  Directly to a Finished Goods Inventory account.
E)  Directly to a Cost of Goods Sold account.F) A) and D)
G) None of the above

Exam 20: Process Costing

Correct Answer
verified

In some circumstances,a process cost accounting system can classify wages paid to maintenance workers as direct labor costs instead of factory overhead.

Correct Answer
verified
True

When raw materials are purchased on account for use in a process costing system,the corresponding journal entry that should be recorded will include:

Correct Answer
verified

The process cost summary is an important managerial accounting report produced by a process cost accounting system.

Correct Answer
verified

In a process cost accounting system,factory overhead costs can be allocated to production departments by using a predetermined overhead allocation rate.

Correct Answer
verified

Process costing is applied to operations with repetitive production and heterogeneous products.

Correct Answer
verified

In process costing there is never a balance remaining in Factory Overhead that needs to be closed at period end.

Correct Answer
verified

In process cost accounting,all labor that is applied exclusively in a single production department is considered to be direct labor.

Correct Answer
verified

Equivalent units of production refer to the number of units that would be completed if all effort during a period had been applied only to those units that were started and completed in a period.

Correct Answer
verified

Correct Answer
verified

Which of the following statements is most accurate?

Correct Answer
verified

Prepare general journal entries to record the following production activities for Sherman Manufacturing. a.Purchased $82,000 of raw materials on credit. b.Used $63,500 of direct materials in production. c.Used $12,800 of indirect materials.

Correct Answer
verified

In a process costing system,factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

Correct Answer
verified

Equivalent units of production are always the same as the total number of physical units finished during the period.

Correct Answer
verified

Direct labor and indirect labor are recorded,respectively,to:

Correct Answer
verified

Correct Answer
verified
False

A process cost summary includes the amounts of equivalent units of production for the period.

Correct Answer
verified

In process cost accounting,the classification of materials as direct or indirect depends on whether they are clearly linked with a specific process.

Correct Answer
verified
True

Correct Answer
verified

In a process cost accounting system,direct material costs incurred are recorded:

Correct Answer
verified

Exam 20: Process Costing

Correct AnswerverifiedShow Answer

In some circumstances,a process cost accounting system can classify wages paid to maintenance workers as direct labor costs instead of factory overhead.

Correct AnswerverifiedTrue

When raw materials are purchased on account for use in a process costing system,the corresponding journal entry that should be recorded will include:

Correct AnswerverifiedShow Answer

The process cost summary is an important managerial accounting report produced by a process cost accounting system.

Correct AnswerverifiedShow Answer

In a process cost accounting system,factory overhead costs can be allocated to production departments by using a predetermined overhead allocation rate.

Correct AnswerverifiedShow Answer

Process costing is applied to operations with repetitive production and heterogeneous products.

Correct AnswerverifiedShow Answer

In process costing there is never a balance remaining in Factory Overhead that needs to be closed at period end.

Correct AnswerverifiedShow Answer

In process cost accounting,all labor that is applied exclusively in a single production department is considered to be direct labor.

Correct AnswerverifiedShow Answer

Equivalent units of production refer to the number of units that would be completed if all effort during a period had been applied only to those units that were started and completed in a period.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is most accurate?

Correct AnswerverifiedShow Answer

Prepare general journal entries to record the following production activities for Sherman Manufacturing. a.Purchased $82,000 of raw materials on credit. b.Used $63,500 of direct materials in production. c.Used $12,800 of indirect materials.

Correct AnswerverifiedShow Answer

In a process costing system,factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.

Correct AnswerverifiedShow Answer

Equivalent units of production are always the same as the total number of physical units finished during the period.

Correct AnswerverifiedShow Answer

Direct labor and indirect labor are recorded,respectively,to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedFalse

A process cost summary includes the amounts of equivalent units of production for the period.

Correct AnswerverifiedShow Answer

In process cost accounting,the classification of materials as direct or indirect depends on whether they are clearly linked with a specific process.

Correct AnswerverifiedTrue

Correct AnswerverifiedShow Answer

In a process cost accounting system,direct material costs incurred are recorded:

Correct AnswerverifiedShow Answer

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Correct Answer
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True

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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False

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True

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Correct Answer
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